Hey guys. You may want to read this. This will help you understand what could be and mostly likely what’s in play.
Current Opportunities and Trends
As of the end of March 2023, there are approximately 300 U.S.-listed SPACs searching for targets,2 and while this number is lower than in previous years there is still intense competition for high-quality companies with high-growth stories. As a result, U.S.-listed SPACs are looking abroad to foreign markets, including Canada. This is creating opportunities for Canadian companies interested in becoming listed on a U.S. stock exchange upon the closing of a de-SPAC.
The de-SPAC route offers young, fast-growing Canadian companies a faster path to becoming a U.S. public company than the traditional IPO route, with the benefit of greater market certainty, flexibility to structure deals in their favor, strategic partnerships with a quality sponsor and wider access to capital and liquidity.
Cross-Border Considerations
Structure
In a Canadian cross-border de-SPAC transaction, unless a Canadian target converts to a U.S. company (an expensive process with potentially significant adverse Canadian tax implications for the Canadian target), the preferred options are for the Canadian target to either become the U.S.-listed entity (in which case the Canadian target becomes the ultimate parent) or to enter into an arrangement with a U.S.-listed SPAC to swap its shares for U.S.-listed shares upon closing of a business combination (in which case the U.S.-listed SPAC becomes the ultimate parent).
AI
