ICR Publishes a Primer Report on Special Purpose Acquisition Vehicles (SPACs)
Reviews the Strategic Communication Challenges of Executing Successful SPAC Transactions
New York, NY – October 29, 2018 – ICR, a leading strategic communications and advisory firm, today announced that it has published a primer report on Special Purpose Acquisition Vehicles (SPACs). This “Primer on SPACs” provides an overview of the SPAC market, where SPACs typically list, and the unique communications challenges for executing a successful transaction or “de-SPACing.”
SPACs are formed to raise capital in an initial public offering (“IPO”) with the purpose of identifying and acquiring one or more operating companies through a business combination. Since 2016, 150 SPACs have priced IPOs world-wide, 84 of which are listed in the U.S. In total, current public SPACs that have not yet completed their acquisitions hold approximately $23 billion in cash.
“SPACs are unique investment vehicles that oftentimes provide institutions the opportunity to invest alongside experienced entrepreneurs and other investment professionals on a single-deal basis. Investors in SPACs have the benefit of getting an early look at an acquisition and have the right to vote on the transaction,” said Don Duffy, president of ICR. “While SPACs can be attractive investment opportunities, the condensed timeframe to complete the transaction, once an acquisition target is identified, presents unique communication challenges as the newly combined company is thrust into the public equity markets. This elevates the importance of detailed financial modeling, conservative forecasting and the development of a strategic communications plan to establish a successful track record as a new public company.”
Commenting on the communications challenges SPACs face, Phil Denning, partner at ICR, added: “The planned business combination announcement is a key communications milestone that needs to position the transaction so that shareholders find the combination compelling, or they could exercise their right to redeem their shares for cash. In addition to the shareholders, the company needs to articulate its strategy to all other stakeholders, including employees, customers and other key business partners. On the day the transaction is announced, the target company needs to have a comprehensive communications strategy and the necessary public company infrastructure in place to begin to transition the narrative from the SPAC sponsor’s messaging to the go-forward business strategy.”
ICR is the largest advisor and communications consultant to SPACs having completed dozens of transactions over the past decade. To obtain a copy of ICR’s “Primer on SPACs”, please click here.
Established in 1998, ICR partners with companies to optimize transactions and execute strategic communications programs that achieve business goals, build credibility and enhance long-term enterprise value. The firm’s highly differentiated service model, which pairs capital markets veterans with senior communications professionals, brings deep sector knowledge and relationships to more than 500 clients in approximately 20 industries. Today, ICR is one of the largest and most experienced independent communications and advisory firms in North America maintaining offices in New York, Norwalk, Boston, San Francisco and Beijing. Learn more at www.icrinc.com. Follow us on Twitter at @ICRPR.
Brian Ruby, ICR