Douglas Ellenoff, Partner of Ellenoff Grossman & Schole (EGS), explains what SPACs are
”A SPAC is a registered IPO, that raises money that sits in a trust account, that is created and formed by private equity sponsors and well-known business people. And that money that sits in the trust account … is used to buy a private company, thereby taking a private company public through a reverse merger of sorts. It’s either a financing technique, an M&A transaction to get a private company public. It enables retail investors and public investors to participate in private equity transactions, single purpose private equity transactions, sponsored by some of the best-known private equity professionals in the country, and that’s what a SPAC is in essence”, says Douglas Ellenoff, Partner, Ellenoff Grossman & Schole (EGS).
Ellenoff Grossman & Schole (EGS) is one of the heavy weights in our team of SPAC specialists.
Designing, structuring, setting up a SPAC, arranging for a successful IPO and mastering acquisitions and mergers that add value to the mission of a SPAC are a project that requires a well-established team specialised on SPACs.
Determining the right business idea and acquisition strategy as well as forming a convincing board are just two critical aspects of successful SPACs.
SPAC IPOs, like any IPOs, do need the approval of the Security Exchange Commission (SEC), if a SPAC IPO is planned at Nasdaq or NYSE. Ensuring the approval of a SPAC’s prospectus by SEC requires proven experience and professional familiarity with SPAC-specific legal matters. That’s where our team member Ellenoff Grossman & Schole (EGS) comes in.
Choosing the right prospective institutional investors for the first roadshow, before the IPO, is essential for a successful SPAC IPO. It is needless to say that the right institutional investors must be approached for the specific acquisition strategy of a SPAC, being familiar with their specific investment policies and strategies. At this point, the underwriting bank plays a central role.
Our LENUS BIOSCIENCES SPAC focuses on investments in the nanotech medical cannabis industry.
HEIDI, a SPAC focused on the acquisition of promising companies with forward-looking technologies and a track-record in energy production or distribution.