SPAC Special Purpose Acquisition Corporation

Transcription

1 PAC pecial Purpose Acquisition Corporation

2 hat is a PAC? Newly formed corporation by prominent and qualified sponsor/management team for the purpose of raising capital in an IPO in anticipation of identifying and consummating a business combination PAC seeks to leverage the strength and recognition of the management team within an industry or geographic location to secure propriety deal flow and identify attractive acquisition candidates Provides public company transparency to investors with full disclosure and voting rights with respect to approving the proposed business combination Public shareholders are able to sell their securities in the open market tructure permits an investor to: Approve the business combination Reject the business combination and elect to receive pro rata portion of the amount held in the trust account (even if the majority of holders approve the business combination)

3 hat are the Advantages to the Investor? Access to investments in acquisitions and buy outs typically restricted to private equity funds Investing with ponsor (investing their own capital up to % of IPO) who have industry expertise tructure and Limited Risk Capital held in a trust account pending approval of business combination Benefits from liquidity of publicly traded security and ability to control timing of exit Pending business combination, no cash compensation to ponsor/anagement eam arrants included in Units offered in IPO enable holder to invest more capital at a pre determined price and leverage initial investment Grants investors voting rights to approve or reject the business combination Provides a minimum liquidation value per share in the event no business combination is effected

4 hat Are Advantages o ponsor/anagement? Pre funding an acquisition strategy Greater flexibility than with traditional private equity Better economics for sponsor/management ore credibility with seller with cash in trust

5 Offered ecurities* Offerings consist of units comprised of common shares and warrants that are registered with the EC and trade freely raditional PAC tructure $0.00 Unit Composition of Units arrant trike Price arrant Exercise Period common share warrant rade separately $.0 year life from the date of the IPO Call Provision Liquidation Value per hare $. for any 0 trading days within a 0 day period $.+

6 eatures eature hird Party Escrow arget Enterprise Value must be 0% of net assets ignificance.% + of cash held in trust Ensures that only targets of a minimum size are proposed hareholder Approval Only well received transactions get approved anagement Ownership and Concurrent Investment Incentivizes management to find and close a deal Escrow of Insider s hares Insiders do not participate in a liquidating distribution for interests held prior to IPO Deal Deadline Limits the time capital is invested

7 PAC Regulatory History Disruptive Events Concern with identification of deal prior to IPO International hipping (ebruary July 00) arrant Purchase Obligation/Regulation Key Hospitality (EG/Underwriter Counsel) (November 00) Amending Charter Great all Acquisition (January 00) Delaware Dissolution HD Partners (EG Issuer Counsel) (ay 00) arrant EI 00 Cash ettlement Value of arrants Energy Infrastructure (EG Underwriters Counsel) (July 00)

8 rends Concurrent Private Placement/ponsor Loan AI PAC s Private PAC s Business Combinations with imultaneous PIPE s

9 iming and Responsibilities onth onth onth onth H H H H ponsor eam Company Counsel Underwriters Underwriter s Counsel eek CC U UC Objectives Primary Responsibility Organizational eeting, CC, U, UC Complete working group list Execute Engagement Engage Underwriter Counsel and Issuers Counsel, U et up corporation CC

10 iming and Responsibilities onth onth onth onth H H H H eek 0 [Day before Closing Date] [Closing Date= days after pricing or next business day] Underwriters sales force meeting ( teach in ) Company presentation to institutional sales force inalize road show presentation schedule Company presentation to retail sales force end out red herrings Institutional meetings (Domestic and European) Negotiate underwriting agreement Agree on final terms of offering Price offering, sign underwriting agreement Go effective (delivery of comfort letter and CC opinion) ile final prospectus Objectives Print and distribute final prospectus Closing. ecurities delivered and payment is made to the Company minus the underwriters discounts Closing documents exchanged Primary Responsibility UC, CC, U, U, U, U, CC, U UC, CC, U, U

11 iming and Responsibilities onth onth onth onth H H H H eek Objectives Primary Responsibility 0 [Day before Closing Date] [Closing Date= days after pricing or next business day] Underwriters sales force meeting ( teach in ) Company presentation to institutional sales force inalize road show presentation schedule Company presentation to retail sales force end out red herrings Institutional meetings (Domestic and European) Negotiate underwriting agreement Agree on final terms of offering Price offering, sign underwriting agreement Go effective (delivery of comfort letter and CC opinion) ile final prospectus Print and distribute final prospectus Closing. ecurities delivered and payment is made to the Company minus the underwriters discounts Closing documents exchanged UC, CC, U, U, U, U, CC, U UC, CC, U, U

12 About Ellenoff Grossman & chole LLP Ellenoff Grossman & chole LLP is a New York based law firm with over professionals offering its clients legal services in a broad range of business related matters. he irm specializes in many areas of commercial law: Corporate, ecurities, Broker Dealer Regulations, Hedge unds, Real Estate, Litigation, ax and Estate Planning. he philosophy of the irm is to provide the highest quality legal advice and counsel, dedicating consistent, personalized attention to each client at a reasonable price. he irm has over 0 securities professionals specializing in a range of activities, including: PIPEs Public Offerings (IPOs and econdaries) Including PACs ergers and Acquisitions Exchange Act reporting (orm 0 Ks, 0 Qs and Proxies) INRA (formerly NAD), AEX, NADAQ and OC compliance Broker dealer regulations Rule transactions ection compliance Barry I. Grossman Adam imeles James angan Douglas. Ellenoff artin R. Bring Asim haikh Grabowski Brian C. Daughney Christopher E. Celano amar Donikyan C. David elengut ichael idura Phi H. D. Nguyen Lawrence A. Rosenbloom arah E. illiams Joan Adler tuart Neuhauser Annie Y. ong Brian Lee Eden Rohrer teven aide Kathleen Cerveny tacy Nathanson

13 PAC Practice Ellenoff Grossman & chole LLP During the course of the last two years, Ellenoff Grossman & chole LLP has been involved at various stages in over 0 proposed PACs. of those financings were successfully consummated and resulted in the raising of over $,00,000,000. e have several others on file with the ecurities and Exchange Commission awaiting their road shows and numerous others in the pre filing preparation stages. At present, we have 0 securities professionals who are engaged in our PAC practice. Ellenoff Grossman & chole represented of the issuers listed below and underwriters (errill Lynch, Citigroup Capital arkets, organ Joseph, Roth Capital Partners, and axim Group). G Acquisition Corp. ($,000,000) eanergy aritime Corp. ($0,000,000) Vantage Energy ($0,000,000) Key Hospitality ($,000,000) Energy Infrastructure Acq. Corp. ($0,00,000) Alpha ecurity ($0,000,000) HD Partners Acquisition Corp. ($0,000,000) China Growth North ($,000,000) Boulder pecialty Brands, Inc. ($0,0,0) China Growth outh ($,000,000) Dekania Corp. ($,000,000) ransech ($,000,000) Healthcare Acquisition Corp. ($,00,000) PinPoint Advance ($,000,000) Echo Healthcare Acquisition Corp. ($0,000,000) Affinity edia Int l ($,,000)

14 his information may answer some questions, but is not intended as a comprehensive analysis of the topic. In addition, this information should not be relied upon as the only source of information. his information is supplied from sources we believe to be reliable but we cannot guarantee its accuracy. his document and the information contained herein is confidential. his document has been furnished to you solely for your information and neither this document nor the information contained herein my be reproduced, disclosed or redistributed, in whole or in part, by mail, facsimile, electronic or computer transmission or by any other means to any other person, except with the prior written consent of the Ellenoff Grossman & chole LLC. he material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. his presentation is made solely for the interest of friends and clients of Ellenoff Grossman & chole LLP and should in no way be relied upon or construed as legal advice. or specific information on particular factual situations, an opinion of legal counsel should be sought.