This is a much-needed work in the financial literature, and it is the first book ever to analyse the use of Special Purpose Acquisition Companies (SPACs) from a theoretical and practical perspective. By the end of 2020, more than 240 SPACs were listed in the US (on NASDAQ or the NYSE), raising a record $83 billion. The SPAC craze has been shaking the US for months, mainly because of its simplicity: a bunch of investors decides to buy shares at a fixed price in a company that initially has no assets. In this way, a SPAC, also known as a "blank check company", is created as an empty shell with lots of money to spend on a corporate shopping spree.
Could the trend be here to stay? Are SPACs the new legitimate path to traditional IPO? This book tackles those questions and more. The author provides a thorough analysis of SPACs including their legal framework and how they are used as a risk mitigation tool to structure transactions. The main objectives of the book are focused on finding a working definition for SPACs and theorising on their origins, definition, and evolution; identifying the objectives of financial regulation within the context of the recent financial crisis (2007–2010) and the one that is currently unfolding (Covid-19); and also describing practical examples of SPACs through a comparative study that, for the first time, outlines every major capital market on which SPACs are listed, in order to identify a possible international standard of regulation.
The book is relevant to academics as well as policymakers, international financial regulators, corporate finance lawyers as well as to the financial industry tout court.
Table of Contents
Introduction 1 Against debt: the remarkable story of SPACs 2 Towards a definition of SPACs: origin, limits and perspectives of SPACs in the US 3 SPACs between risk and uncertainty, and the role of the law 4 The international f inancial regulation of SPACs 5 De-SPAC: M&As, regulatory oversight, and securities litigation 6 SPACs: law, uncertainty and the market
Daniele D’Alvia, PhD, is a pioneer in SPAC’s studies in law and winner of the Colin B Picker Prize. He is an Associate Research Fellow at IALS in London and a Teaching Fellow in Banking and Finance Law at Queen Mary University of London. He is the module convener in Comparative Law at Birkbeck College, University of London.
"The book Mergers, Acquisitions and International Financial Regulation: Analyzing Special Purpose Acquisition Companies, by Daniele D’Alvia, with a foreword written by my student Yochanan Shachmurove, is the first book on Special Purpose Acquisition Companies (SPACs) that uses a comparative perspective. The book provides insights to one of the re-emerging financial instruments that is currently attracting attention by financial- market practitioners and researchers. A worth-reading book."—Professor Finn Kydland (Nobel Laureate), University of California, Santa Barbara, California.
"Written with unusual clarity and insight, this is a major contribution on an important, emerging topic. Daniele D’Alvia is to be congratulated on the dual achievements of pioneering the analysis of a largely neglected topic and telling the story with a novelist’s flair." — Ross P Buckley, KPMG-KWM Professor of Disruptive Innovation, UNSW Sydney.
"Daniele D'Alvia is an academic and corporate finance lawyer, and one of not many academic experts with SPAC advisory experience. The well-researched book tells the unique story of SPACs. Indeed, SPACs are financial innovations and are the disruptors of traditional M&A and IPO process. The book has Chapters on SPACs' financial regulation, its evolution and a difficult to challenge view on self-correcting market practices. Chapter 5 includes interesting thoughts on the evolving De-SPAC transactions. The book serves as a guide to sponsors, investors, listing venues, lawyers, including in-house lawyers of SPAC target companies." — Ferdinand Mason, Partner at White & Case LLP, London.
"The book argues that SPACs are a fund-raising innovation that will stand the test of time. A richly argued resource for theoretical and up-to-date legal discussions on SPACs, a must-have for researchers and practitioners in this area."—Iris H-Y Chiu, Professor of Corporate Law and Financial Regulation, University College London.
"An insightful read from one of the few expert in SPACs at international level. The book contains some great tips to ensure your SPAC is a success. Highly practical and commercially focused, the book provides a good and provocative contribution to alternative acquisition models. Scholars, corporate finance lawyers, sponsors and investors in the field should save a place for it on their shelves."—Luca Fabio Giacometti, Chairman and CEO of Galileo Acq. Corp., USA.
"SPACs are the financial asset class poorly understood by most stakeholders and carrying undeserved label of opaqueness. This pioneer book by Daniele D'Alvia educates and explains why SPACs are viable and sustainable financing mechanism."—Milos Vulanovic, Associate Professor of Finance at EDHEC Business School.
"With torrents of money jostling for return in a zero-interest-rate-world, listed shell companies created specially to acquire growing firms (SPACs) became a popular alternative to IPOs in 2020. Daniele D’Alvia’s book provides an excellent introduction to the history, operation, and rationale behind SPACs."—Prof. David Donald, Attorney at Law (New York) and Professor at the Faculty of Law, The Chinese University of Hong Kong, Hong Kong SAR, China.
"The book provides a useful and innovative contribution to the burgeoning debate on Special Purpose Acquisition Companies. It is highly informative as it discusses the origins of SPACs, and their future perspectives, across different legal systems and markets."—Filippo Annunziata, Associate Professor of Financial Markets Law, Bocconi University, Milan, Italy.
"Daniele DAlvia has written a must-read history of SPACs…Read this book if you want to better understand the SPAC market."— Kristi Marvin, Founder of SPACInsider.com.
"The recent global rise of SPACs as an innovative way to raise finance dramatically underscore the need for academic analysis of this new phenomenon. This book provides an up-to-date analysis of the legal and economic parameters underpinning Special Purpose Acquisition Companies, how they work (or not), and what they mean for firms and investors. Presenting material in a very lucid manner, drawing on many case studies, and taking a truly global perspective, the book provides an invaluable guide for all who want to master the complex subject."—Wolf-Georg Ringe, Professor of Law & Finance, University of Hamburg, Germany
"The sovereign debt crisis has curably changed the meaning of financial risks and systemic failures in the European Union and globally. Dr. Daniele D’Alvia’s book is an indispensable companion in the post-financial crisis world of international financial transactions and laws."—Prof. Stéphanie Laulhé Shaelou, Professor of European Law and Reform and Head, School of Law, University of Central Lancashire, Cyprus campus and EUI Fellow, Law Department, Villa Salviati, European University Institute, Florence, Italy.
"Markets are full of risks. This should never worry us though, as risks can and should also be understood as profitable opportunities, especially where we can mitigate against them. But markets are also just as full of uncertainties; unknowns which cannot be quantified as risks, cannot be mitigated against, and which may offer heightened profit opportunities, but which also can spell disaster. Recalling Frank Knight’s core 1921 message, but this time around with application to financial (investment) instruments, Daniele D’Alvia offers us a fascinating contemporary overview of risks, uncertainty and profit, as well as the difficult role the law plays, or sometimes doesn’t play, in regulating them. This is an important book which also asks whether we can identify alternative investment risk management vehicles in our search for constant profit (Special Purpose Acquisition Companies), thus minimizing the dangers of renewed market collapse in heightened uncertainty. It is an important book also in reminding us that law too has its regulatory limits, and that we must never be complacent in our assumptions that we can simply regulate all market dangers away."—Professor Michelle Everson, School of Law, Birkbeck College, University of London, United Kingdom.
"This is a deeply researched yet very accessible book on one of the more creative and increasingly common capital markets financing techniques. For anyone thinking of issuing or investing in a SPAC, or being acquired by one, this book will help to demystify a very complex subject."—Professor Scott Moeller, Founder and Director, M&A Research Centre, Bayes Business School (City, University of London).
"Daniele D’Alvia succeeds in providing an accessible and engaging text mapping the development of SPACs and their developing financial regulation. The book is impressively researched providing significant economic and legal insight as to the use, regulation and impact of SPACs."—Professor John K Ashton, Professor in Banking, Bangor University.
"SPACs are now a mainstream way of raising capital. But there remains much confusion in practice as to the good and bad features of SPACs. This book sorts out the mechanics of SPACs and provides useful insights for academics and practitioners alike."—Prof. Douglas Cumming, Distinguished Professor of Finance and Entrepreneurship, College of Business, Florida Atlantic University, Boca Raton, Florida.
"The book provides an extensive analysis of the drivers behind the spectacular rise of SPACs and their regulation. It is an invaluable addition to the discussion regarding the benefits and perils of these transactions. A must-read for academics, students, and finance professionals."—Alexandros Seretakis, Assistant Professor of Law and Director MSc in Law and Finance, Trinity College Dublin.
"As a researcher in both corporate and financial law, I find Dr D’Alvia’s book very useful, especially the chapter on international financial regulation of Special Purpose Acquisition Companies (SPACs). The book provides a unique insight into SPACs from a comparative legal perspective. Dr D’Alvia’s book is a comprehensive and timely contribution to the increasingly growing literature on SPACs. I believe that this book is of interest to anyone working or researching in capital markets and financial corporations."—Dr Alison Lui, Reader in Corporate and Financial Law, Associate Dean Global Engagement at Liverpool John Moores University.
"SPACs are an alternative way to access stock markets and increasingly important. However, research on SPACs has been limited in corporate finance and related disciplines. This book offers a very detailed analysis of SPACS and regulatory frameworks. In particular, the examples discussed in Chapter 4 could be used to test the impact of regulatory changes on the use of SPACs."—Professor Gerhard Kling, Chair in Finance, University of Aberdeen.
"SPACs are gaining global popularity as an alternative to traditional IPOs. However, this area of knowledge has been largely underexplored by legal scholars. The latest book of Daniele D’Alvia is a pioneering work examining the operating mechanism of SPACs and its regulation from an international and comparative perspective. It is a must-read for researchers, practitioners, and policy-makers across the world. " — Dr Lerong Lu, Senior Lecturer in Law and Director of LLM Law & Technology, King’s College London, UK
"Daniele D’Alvia’s book has established himself as the expert in this niche and innovative fund raising mechanism for the acquisition of growing firms. The book offers an insightful discussion on the history, economic rationale and systems theory on the SPACs. This is a must-read book for those practitioners, academic researchers and policy makers who have interest in the operation of the SPACs." — Mark Hsiao, Associate Professor in Law, Leicester Law School, University of Leicester, UK.
"D’Alvia’s book is essential to understanding the historical evolution of the SPAC market, bringing investors up to date with the present SPAC environment. Comprehensive, global, with deep insights from many angles, with specific and valuable information on regulation." — Carol Marie Boyer, Ph.D., Associate Professor of Finance, Long Island University – Post, Brookville, NY, USA
"Although SPACs have only recently become a very popular option for a company to go public, they have been around for quite some time and Professor Danielle D’Alvia was one of the first to study this type of structure in depth. His book is an indispensable source of information for those interested in learning more about this innovative vehicle." — Carlos Lobo, Partner, Hughes Hubbard & Reed LLP, New York, USA