Wednesday, June 07, 2023 8:11:27 PM
DOES A $400 MILLION SPAC ACQUIRE A COMPANY THAT IS VALUED AT $400 MILLION (OR LESS)?
No. There is no maximum size of a target company. In fact, it is typical for a SPAC to combine with a company that is 3-5x times its IPO proceeds, which means that the ownership team will ultimately remain as the majority shareholders with the SPAC investors representing a minority (typically 15-30%) of the post-combination entity.
At SCP & CO Healthcare Acquisition Company, we are looking to find a company with an Enterprise Value (EV) between $750 million and $1.5 Billion. This EV is 3.25x to 6.5 times the size of our SPAC, which raised $230 million, including the full exercise of the overallotment shares.
https://www.scpandco.com/how-does-a-spacs-ipo-value-relate-to-its-total-purchasing-power/
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