A SPAC forward purchase agreement (FPA) is a contract in which investors (often the SPAC sponsor or institutional investors) commit to buy a predetermined amount of SPAC units—typically consisting of common shares and warrants—at a set price upon the closing of the SPAC’s merger with its target company. What Is a SPAC Forward Purchase Agreement?…
Introduction In recent years, Special Purpose Acquisition Companies (SPACs) have become a popular vehicle for taking companies public. Alongside their rise, one financial instrument has drawn increasing attention: the SPAC Warrant. Although often overlooked by retail investors, warrants play a critical role in deal structuring and investor returns. They provide both incentives for early participation…
A Special Purpose Acquisition Company (SPAC) relies on a trust account to safeguard investor capital raised through its Initial Public Offering (IPO). This trust is central to the SPAC model, ensuring transparency, accountability, and investor protection throughout the process. The funds placed in the trust can only be used for specific purposes: completing a merger…
Special Purpose Acquisition Companies (SPACs) have emerged as a popular alternative to traditional IPOs, offering private companies a faster and less complex route to the public markets. A SPAC’s capital structure is a key factor in how these deals are executed and financed. It is designed to balance the interests of public investors, sponsors, and…
Special Purpose Acquisition Companies (SPACs) have emerged as a popular alternative to traditional IPOs, offering private companies a faster and more flexible route to public markets. While the structure may sound complex, the overall process follows a clear sequence—from formation to either a merger or liquidation. Here’s a step-by-step look at how SPACs work: 1.…
Special Purpose Acquisition Companies (SPACs) have gained significant attention in global capital markets as an alternative route for private companies to go public. Unlike traditional Initial Public Offerings (IPOs), SPACs are shell companies that raise money from investors with the sole purpose of acquiring or merging with a private company. Here are the defining features…
A SPAC (Special Purpose Acquisition Company) involves multiple stakeholders, each playing a distinct and important role throughout the formation, acquisition, and post-merger phases. Key Stakeholders in a SPAC 1. Sponsors/Founders 2. Public Shareholders 3. Target Company 4. PIPE Investors (Private Investment in Public Equity) 5. Advisors and Underwriters 6. Regulators All these stakeholders must coordinate…
In recent years, Special Purpose Acquisition Companies (SPACs) have become a widely discussed innovation in global capital markets. A SPAC merger—also known as a de-SPAC transaction—offers private companies an alternative pathway to become publicly listed without going through the longer and more complex traditional Initial Public Offering (IPO) process. What is a SPAC Merger? A…
Special Purpose Acquisition Companies (SPACs) have become a popular tool in global capital markets, particularly in the U.S., where they offer private companies an alternative route to go public. While India’s regulatory framework does not yet fully support domestic SPAC listings, the discussion around them is gaining momentum—especially with SEBI exploring possibilities and GIFT…
In recent years, Special Purpose Acquisition Companies (SPACs) have become one of the most talked-about vehicles in global capital markets. Often called *“blank-check companies,”* SPACs raise capital through an IPO with the sole purpose of acquiring a private company. This allows the target firm to go public without undergoing the longer and more complex traditional…