A SPAC goes through various steps and stages throughout its lifecycle. This post outlines the steps from pre-IPO through business combination.
1: Prospectus Filing
The first stage in the SPAC lifecycle is the prospectus filing. This filing includes disclosure of the terms and structure of the SPAC offering and the target industry or segment focus of the SPAC.
2: IPO Marketing
During the IPO marketing stage, the underwriter arranges the roadshow, for the sponsor group to present to potential IPO investors. This roadshow is less extensive than that of a traditional IPO.
3: IPO Pricing
Today’s SPACs are based on a number of standard characteristics. One of these characteristics is the IPO pricing. The IPO units are priced at $10.
At this stage, the SPAC management signs a Definitive Merger Agreement for a Business Combination with an operating business and announces the transaction.
5: Proxy Filing
After a Definitive Merger Agreement is signed and the business combination is announced, the SPAC files a Proxy Filing with the SEC disclosing the terms of the merger and seeking stockholder approval.
6: Stockholder Marketing
After filing the Proxy Filing, the SPAC management and SPAC IPO underwriters market the proposed transaction to the SPAC stockholders and other investors.
7: Closing or Liquidation
If the closing conditions are met, the Business Combination is closed. If not, the SPAC liquidates and returns the funds to stockholders.
Let us guide you through the SPAC process.
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