Six years ago, the TSX adopted specific rules governing the
listing of Special Purpose Acquisition Corporations (SPACs) in
response to the growing popularity of these investment vehicles in
the United States. However, SPACs have garnered little interest
north of the border, rendering these rules unused – until
now. On April 21, 2015, Dundee Acquisition Ltd. completed its
initial public offering of $100 million Class A restricted voting
units (each unit containing one Class A share plus half a purchase
warrant), making it the first SPAC to go public on Canadian capital
markets.
SPACs, also referred to as "blank cheque companies",
raise money through an IPO and then cast a wide net in search of a
private company to acquire. According to TSX regulations, a SPAC
has a maximum of 36 months after listing to complete an
acquisition. Funds raised, net of the underwriters'
compensation and a percentage withheld to cover working capital and
operating expenses (at most 10%),
