A “Special Purpose Acquisition Company” (“SPAC”) is an investment vehicle that permits public stock marketplace traders to invest in non-public fairness type transactions
SPAC’s are “Blank Check” companies that have no operations but go public with the intention of merging with or acquiring a company business with proceeds (“Business Combination”) raised in the SPAC’s IPO. Public shareholders are able to sell their securities in the open market in addition to approving the business combination and elect to receive a pro rata portion of the amount held in the SPAC’s trust.
SPAC opens up new market opportunities and accelerated growth for acquired companies. We at FGN Capital is using our expertise in our key market sectors of Real Estate, Commodities, Logistics, Telecommunications, FinTech, Cyber Security and Artificial Intelligence to take advantage of SPAC developments.
Ability to Attract Capital
SPACs have demonstrated the ability to successfully raise capital commensurate with management’s prospective target range.
Additional capital is readily available as necessary to merge with outsized targets.
SPAC IPO may be seen as an additional structure to supplement management’s suite of investment activities.
Transparent governance meets both public market and Sponsor/Manager needs.
Significant of the pre-merger primary equity is given to management as compensation for managing the SPAC.
Management purchases additional equity in the form of units to increase potential return and align interests with investors.