Special Purpose Acquisition Companies (SPACs)

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Special Purpose Acquisition Companies (SPACs) are a convenient way of raising finance for a specific purpose, most usually the acquisition of a third party company. Listing a SPAC on London Stock Exchange is a straightforward step by step process, beginning with an Initial Public Offering (IPO), that allows sponsors to attract a wide range of potential investors interested in generating returns through the acquisition of an attractive company or other asset. 

The IPO process

  • Capital raise via offering of share and/or warrant
  • Typically, the majority of gross proceeds are held in US Treasuries and other money market instruments
  • In SPACs, the sponsor subscribes for founder securities and can purchase additional warrants/ordinary shares to make sure they have 'skin in the game'
  • SPACs can be listed on the Main Market under UKLR 13 Equity Shares (shell companies) and on AIM as an investing company.

Post-IPO

  • The sponsor uses their network and industry knowledge to source a target for acquisition:

    • Average fixed period of 24 months to find and complete an acquisition

  • The company uses proceeds, and can use debt and further equity issuance to fund acquisition of a selected target:

    • SPACs can require shareholder approval if they list on AIM or Main.

  • The company 'de-SPACs' and becomes a normal operating company.

    • The business operates under a public listing to create value for investors, alongside sponsors.

  • Liquidation occurs if the business combination is not executed within the agreed timeline:

    • Proceeds returned to shareholders minus expenses

Routes to Market 

Routes to Market: Comparing Main Market and AIM Listing Requirements

 

Main Market

AIM

Regulation

Regulated Market & Listed

MTF

Admission Documentation

FCA approved prospectus

Admission document

Free float

10%

Assessment of appropriateness

Minimum Market Capitalisation

£30/£100m [Note1]

£6m

Adviser

FCA approved sponsor required

Nominated Adviser (NOMAD)

retained at all times

Cancellation

No shareholder approval required

75% shareholder approval required

Explore more

How to list funds

Learn more

Resources for funds

Learn more

Note

[1] required as part of conditions to address a presumption of suspension at acquisition announcement | Back to Note 1

Contact us

Interested in launching a SPAC on London Stock Exchange? Complete the form below and a member of our team will be in touch.

  •
    Katya Gorbatiouk
    Head of Investment Funds, Primary Capital Markets
  •
    Alex Imseeh
    Senior Manager Primary Markets, Funds and ETPs
  •
    Akhil Suresh
    Senior Manager Primary Markets, Funds and ETPs
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