Special Purpose Acquisition Companies (SPACs)
Co-invest with sponsors, and raise capital quickly.
What is a SPAC?
SPACs—or Special Purpose Acquisition Companies—are publicly-traded investment vehicles that raise funds via an initial public offering (IPO) in order to complete a targeted acquisition. They provide private companies with a unique way to access the public markets, while offering investors a way to co-invest side-by-side with best-in-class sponsors.
How Does a SPAC Work?
Listed SPAC Cash Held in Trust
Blind pool of cash raised by financial sponsor through IPO to acquire a private operating company.
Target Operating Company
Fully operating private company.
Acquisition
Acquisition typically within 24 months.
Publicly Listed 'Successor' Company
Value generation through highly incentivized management structure.
Benefits of SPACs
Proven and Reputable Structure
SPACs offer founders efficient access to capital and the ability to build value.
Opportunity for Additional SPAC Formations
SPAC founders have the ability to create additional SPACs.
Faster Capital-Raising Process
SPACs offer faster capital-raising relative to private fund-raising. The accelerated execution and liquidity timeline is typically within 24 months from IPO to M&A.
Nasdaq SPAC Listing Requirements
Read our Listing Guide as a first step to learning more about the SPAC listing process for our US markets and to review the essential information your company needs to pursue a listing on Nasdaq, including timelines, document checklists, listing requirements, and fee structures.
FAQs
Investors who participate in these investment vehicles not only receive common shares, but also warrants as part of the IPO. The initial funds raised through the IPO are placed into a trust or escrow account until the time of a potential business combination occurs. Investors also hold the right to vote on potential business combination targets and can choose to redeem their public shares.
A SPAC is formed from capital raised in a traditional IPO. As a publicly-traded entity, a SPAC must satisfy Nasdaq’s listing requirements. SPACs can be used as a tool by public and private companies to raise funds for the purpose of an acquisition. In a SPAC, original investors vote on the business combination. In traditional IPOs, the underwriters market and sell the company shares.
Our position as the industry leader supports SPACs and target private companies in making a seamless transition to the public markets. Through our market-leading investor relations (IR) intelligence services, we assist companies in building their IR programs and preparing for life as a public company. Beyond capital markets support, Nasdaq also provides post-transaction visibility services that helps to raise the profile of the combined entity to investors and customers.
Nasdaq Legal Disclaimer
Information is provided for educational purposes only. The content does not attempt to examine all the facts and circumstances which may be relevant to any particular company, industry, strategy or security mentioned herein and nothing contained herein should be construed as legal or investment advice. Nasdaq does not recommend or endorse any securities offering; you are urged to read the company’s SEC filings, undertake your own due diligence and carefully evaluate any companies before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED.