Special Purpose Acquisition Company
One or more private individuals/entities can create a
SpecialPurpose Acquisition
Company (SPAC) for the special purpose of acquiring
interest in one or more existing companies or businesses by raising
capital through an initial public offering (IPO), and therefore,
receive profit from such a merger, acquisition and/or other
business transactions. SPAC's were first introduced in the
1990s in the United States of America and recently its popularity
was increased on a global level. Before identifying a business
idea, an IPO is initiated, and consequently, the proceeds from the
IPO shall be used to acquire an existing company. For example,
‘A', ‘B' and ‘C' decide to come
together to set up a SPAC called ABC. ABC will then hire a team of
experts which shall initiate an IPO and raise money through such a
public offering to be placed in a trust. The next step for ABC
would be to target and identify a business acquisition. If ABC
(parent
