Advantages of SPACs Over Traditional IPOs
Advantages of SPACS Over Traditional IPOs
Speed of execution
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Going public through a SPAC is typically faster than going through an underwritten IPO.
In some transactions, the Target becomes public less than two months after signing the de-SPAC merger
agreement.
In a best-case scenario, a traditional IPO takes at least four months.
• Access to additional funds beyond what the SPAC raised in its IPO
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De-SPAC transactions can include a private investment in public equity (PIPE).
The PIPE signs when the de-SPAC merger agreement is signed and funds when the de-SPAC merger closes.
• Deal is not public until signed
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Traditional IPOs are made public when the company files its registration statement with the SEC.
If the IPO falls through, such as because of market conditions, the company's disclosure remains public
knowledge.
In a de-SPAC, if negotiations break down between the Target and the SPAC before signing, the potential de-
SPAC transaction is not made public.
Morgan Lewis
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