Services
SPAC Offerings
Ladenburg Thalmann is at the forefront of the blank check company (commonly referred to as "special purpose acquisition company" or "SPAC") marketplace, having acted as the lead or co-manager of numerous offerings. Our representation adds value and credibility to an offering, through our unique and creative deal structures, institutional and retail distribution, and highly experienced investment bankers. Furthermore, our investment banking team has deep domain experience in healthcare, technology, financials, energy, consumer and international companies allowing for a dynamic and experienced approach to creating shareholder value and investment opportunities.
Since January 2006, Ladenburg has successfully closed 33 SPAC offerings raising approximately $6.6 billion, ranking us as the #1 Lead and Co-Lead Manager of SPAC offerings by offering proceeds.
View representative SPAC offerings
Our excellent relationships with SPAC management teams provide us a competitive advantage as SPAC transactions rely heavily on the quality of management. Ladenburg Thalmann remains a leader and innovator in the SPAC market and is retained by SPAC teams based upon our history of excellence, integrity and focus on creating shareholder value.
Overview
SPACs are newly formed companies that raise equity capital through an initial public offering for the sole purpose of pursuing a business combination in a dedicated industry or geographic location. The offerings are typically sponsored by experienced corporate executives, managers of private equity firms and seasoned entrepreneurs.
The offering is in the form of a unit, comprised of a common share and warrant(s). The offering proceeds are held in escrow in an interest bearing trust account. Immediately following the offering, the SPAC typically has 18 months to announce an acquisition and then an additional six months to receive shareholder approval of the proposed business combination. The sponsors typically receive founder shares or units for 20% of the company, which have value only if an acquisition is completed.
If an acquisition is not completed within the allotted 18 to 24 months, the cash held in escrow is liquidated and shareholders are returned their prorated cash amount. This typically would lead to an investor having 90-100% of their initial investment returned. Currently, SPACs trade on the over-the-counter bulletin board, the American Stock Exchange, and the Alternative Investment Market (AIM), a subsidiary of the London Stock Exchange.
SPACs are unique structures in that they are similar to private equity, but with freely tradable securities that provide transparency because they are regulated by certain SEC rules, requiring the filing of its financial statements. Since a SPAC's unit, stock and warrants are publicly traded, they provide the opportunity for liquidity to an investor when compared to hedge funds and private equity. Furthermore, the publicly listed common shares, warrants and units allow for varying investment strategies, arbitrage opportunities and risk management. In addition, the right of shareholders to vote in approval or rejection of the deal is a positive and unique feature offered to SPAC investors.
Investing in a variety of SPACs provides an alternative to mutual funds or hedge funds, and has various advantages over other capital structures which include hedging options, industry-specific experienced management teams and a multitude of worldwide acquisition targets. For the investor who requires liquidity coupled with principal protection, depending upon the structure, SPACs are potential investment vehicles.
With SPACs, investors rely on a management team and their ability to capitalize on their niche product knowledge to create a profitable company scenario for investors. SPACs compete directly with private equity groups and strategic buyers for acquisition candidates. The tightening of competition between these groups could result in multiple bids for the top tier companies and possibly increase a company's valuation. Ladenburg is dedicated to offering our clients the best investment opportunities in a rapidly changing market.
Unlike hedge funds or traditional asset management vehicles, SPAC management teams have significant personal capital at risk. If the management team is unable to consummate a business combination, they lose 100% of their investment and investors are returned 90-100% of their investment. In addition, management receives no compensation prior to an acquisition.
Disclaimer:
"Ladenburg Thalmann & Co. Inc. may receive or intend to seek compensation for investment banking services from SPAC companies. Investors must make their own determination as to the appropriateness of an investment in any securities referred to herein, based on their specific investment objectives, financial status and risk tolerance. The information presented is for informational purposes only and is not be used or considered as an offer or the solicitation of an offer to sell or buy any securities mentioned herein."
