Special purpose acquisition company

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Special Purpose Acquisition Company

A company that is set up specifically to buy an existing company. The SPAC issues an IPO and collects investments in exchange for common shares in itself. It then uses the capital it raises to identify and then purchase a target company. Sometimes at the outset it may have identified the industry in which it wishes to buy a company, but never the company itself. If, after two years, the SPAC has not found and purchased a company successfully, the initial investments are returned to shareholders. A SPAC is also called a targeted acquisition company.

Special purpose acquisition company (SPAC).

A special purpose acquisition company (SPAC), sometimes called a blank check company or an empty shell company, uses an initial public offering (IPO) to raise money it will use to purchase or merge with an existing company.

The target company is not named at the time of the IPO, and typically has not been selected by the SPAC management. In some cases, however, the relevant sector or industry is identified in the registration documents filed with the Securities and Exchange Commission (SEC).

The terms of each deal vary, but in general, at least 80% of the capital is held in a trust account to be returned to investors if a deal is not finalized within a specific period, usually 18 to 24 months. Investors must approve any deal and acquire 80% of the new publicly held company.

SPACs are controversial, even though they account for a substantial percentage of new IPOs. Advocates point to the lower fees and greater liquidity than is typical of private equity deals. Critics warn of limited investor protections, including third-party claims against assets held in trust, as well as outsized financial benefits for management and underwriters.

References in periodicals archive ?
Our joint [SPAC and NYCB] decision to present one week of the New York City Ballet in 2013 was a financially necessary choice, born not out of a desire to end the residency, but to preserve it," says SPAC president and executive director Marcia White.
A SPAC must also file registration statements with the SEC.
If the firm doesn't manage to identify a target, make an offer, get shareholder approval and get regulators' blessing within 24 months, the SPAC is liquidated and the top execs' money goes to shareholders.
In an effort to reach more women, CAL SPAC has endorsed the effort of Postpartum Support International to designate May as national Maternal Depression Awareness Month.
These projects often give SPAC students a chance to audition for paying gigs, although Locust stressed that his students get no special treatment: They have to dance and act like professionals to land a spot in one of his productions.
It's a way for Chinese companies to get a listing," said Morgan Joseph managing director Dennis Galgano, on Chinese companies' interest in being purchased by US-based SPACs.
SPAC offers clinical performance examinations to qualified students, utilizing a pool of qualified Nursing Faculty as Clinical Associates and Clinical Examiners.
The mayor's press conference took place after he received a letter from SPAC chairman Anthony P.
Founded in 1970, California SPAC is one of The Junior League's oldest and largest state public affairs committees, whose goals are to serve as the voice of the women and children in the communities they serve by introducing and supporting state legislation that improves the lives of women and children in the communities we serve.
The NYCB version, choreographed by Balanchine and Alexandra Danilova after Petipa, was originally commissioned by SPAC in 1974 with Patricia McBride as Swanilda and Helgi Tomasson as the love-struck Frantz.
For more information on SPAC testing in Savannah, contact Dr.
As a nonsubscription add-on to the Broadway Series, the SPAC is offering "Jackie Mason's Much Ado About Everything" (Nov.