Partners' Network

Special Purpose Acquisition Companies (SPACs)

Bill Ackman has just raised $4 billion with an Initial Public Offering (IPO) of a Special Purpose Acquisition Company (SPAC). This was big news and also was the cover story for this week’s Barron’s, so I think this is a good time to explain what SPACs are and Withum’s involvement with SPACs.

SPACs are companies formed to raise funds for the purpose of merging or acquiring one or more businesses. The primary method of raising capital is through an IPO. SPACs are sometimes referred to as blank check companies since they are required to not have any identifiable plans to make any specific investments at the time of the IPO. If the SPAC is unable to consummate a purchase or merger they then liquidate and return the IPO proceeds to the purchasers of the shares.

The sponsors of the SPAC’s IPO invest pre-IPO in the SPAC and usually have a controlling interest. Their shares are referred to as Founders Shares.

Withum is one of the top accounting firms auditing and providing advisory services to SPACs. Through a thorough due diligence process with the largest and most prestigious investment banking firms, Withum is now on a shortlist of acceptable auditors for SPAC IPOs. We also have proven experience and have virtually worked with all the legal and underwriting players in this niche space. Our clients’ IPOs ranged from $50 million to over $1 billion and we have been the auditor of record for over $25 billion raised from SPAC IPOs.

We have a short booklet that provides full information about SPACs, the IPO step by step process and a document request list. If you want a copy, either because you are interested in starting a SPAC or solely for informational background, email me at [email protected] and just put SPAC as the Subject.

If you want additional information or want to discuss anything regarding a SPAC you are welcome to contact Jay Shepulski, Partner and our SPAC Leader at [email protected], or reach out to me and I’ll set up a meeting.

Note that I used Bill Ackman’s SPAC by way of illustration and introduction but I do not know him and in no way express any opinion whatsoever as to whether his SPAC should be invested in.

If you have any business or financial issues you want to discuss please do not hesitate to contact me at [email protected].

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