Special purpose acquisition companies, or SPACs, leapt to fame in 2020 with 248 SPAC initial public offerings raising over $83 billion, and they continue to gain momentum as we head into 2021.
As of Feb. 12, 2021, in the first 43 days of 2021, according to Spacinsider.com, there have already been 144 SPAC IPOs raising nearly $44.3 billion, vastly eclipsing all of 2019 and positioning 2021 to significantly outpace 2020 for SPAC IPO activity.
The stage is therefore set for an explosion of de-SPAC business combinations. As operating companies, sponsors and their SPACs begin discussions about a possible business combination, there are some key timing and process points for both parties to consider, and critical courses to chart, to ensure smooth sailing ahead. As with any deal, timing is everything.
