SPACs in Europe - who is doing SPACs from Europe?

17 February 2021 Insights
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SPACs are finally becoming a thing in Europe.

One year later and 400 SPAC IPOs already executed in the US since the summer of 2020, Europe finally wakes up and smells the coffee.

A quick reminder, a SPAC (special purpose acquisition company) is a quick way of raising money from the public markets in order to finance merger and acquisition opportunities. They are shell companies founded with this sole purpose of acquiring an existing private company so that the target firm can bypass the traditional initial public offering process, which can be expensive, time-consuming and requiring a lot of scrutiny.

It is not a new concept, a SPAC is a financial construction adapted from reverse mergers, which were popular 20 something years ago.

In a standard reverse merger, a successful private company merges with a listed empty shell to go public without the paperwork and rigors of a traditional IPO. The shell is usually a remnant of a previously operational public firm or a public virgin shell formed to combine with a private company.

Where SPACs are different is simply that the shell company is a proactive party, flushed with cash from the IPO and hunting for private targets.

Now - in the United States, SPACS raised a total of $78.2 billion across 244 IPOs in 2020. In the first 6 weeks of 2021 - another 134 firms raised nearly $39 billion.

Just three SPACs were listed in Europe last year, securing $495 million. 

However... also in the first six weeks of 2021 we have seen a lot of Euro discussions about doing a SPAC and, notably, we also have a few doers.

We produced a report profiling a few of those European doers of SPACs. It is available here.

The report includes profiles of 12 people from Europe involved in raising money via SPACS - 4 Germans, 2 French, one from Spain, 2 London-based billionaires, a few entrepreneurs and some well known bankers - one of them touted "the highest-paid banker in Europe".

 

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