Special purpose acquisition company
A special purpose acquisition company raises funds, commonly through a public listing, before identifying or completing a qualifying acquisition. Investors evaluate the sponsor, permitted investment, deadline, redemption rights and proposed transaction under applicable rules. The later combination can provide an alternative route for an operating company to access a public market, but success, valuation and timing are uncertain. Legal and regulatory requirements depend on the market and transaction; a SPAC is different from a securitisation SPV.
Worked example
A listed SPAC raises $100 million and holds the proceeds while seeking a target. Investors assess the proposed business combination and their contractual rights when a target is announced; completion and returns are not guaranteed.
Common mistake
Assuming a SPAC already owns an operating business at the initial fundraising or that a SPAC and a securitisation vehicle are the same structure.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AFM | Direct | September 2026–June 2027 |