Powell Goldstein is at the forefront of the SPAC movement through our representation of Echo Healthcare Acquisition Corp. in its $50 million IPO in March 2006 and the subsequent closing of the acquisition of XLNT Veterinary Care, Inc. in January 2008. A Special Purpose Acquisition Company, or SPAC, is an acquisition vehicle that is formed for the sole purpose of conducting an IPO (or alternatively a private placement) and utilizing the proceeds to complete a merger or other business combination.
Our SPAC lawyers bring a multi-disciplinary approach to the representation of our clients engaging in a SPAC transaction, including lawyers practicing in state and federal securities laws, corporate governance, mergers and acquisitions, tax and ERISA and employee benefits. These transactions involve a myriad of legal issues and challenges with regulators and industry participants that our SPAC lawyers understand, including but not limited to:
- Establishing the fundamental terms for the SPAC such as the liquidation threshold, ability to utilize interest accrued on the trust account and obligations of the founders, and identification of an industry space for the target acquisition;
- Establishment of the required trust account to hold the offering proceeds;
- Issuance of the warrants;
- Management team investment arrangements;
- Stockholder voting issues;
- Negotiation of the underwriting agreement; and
- Terms and timing of the acquisition transaction.
We are currently working with a number of clients analyzing potential SPAC opportunities spanning a variety of industries. We strive to enhance our SPAC clients' ability to successfully complete an IPO and acquisition transaction by leveraging our in-depth industry knowledge with our contacts with investment bankers and other industry participants.
