Legal Minds on Markets: Episode two - Don’t look SPAC in anger: structuring business combinations involving offshore incorporated SPACs

Welcome to Legal Minds on Markets, providing clear views and incisive commentary on trending topics in the financial world with an offshore slant.

Don’t look SPAC in anger: structuring business combinations involving offshore incorporated SPACs

In our second episode George Weston, Partner in our Corporate team in the BVI and an expert on ECM and M&A transactions, and Murray Roberts, Director at Harneys Fiduciary based on the US West Coast, discuss de-SPAC transactions and the options available for structuring business combinations where a SPAC is incorporated offshore. 

Although the SPAC IPO boom witnessed throughout 2020 and Q1 2021 continues to taper off somewhat, the Cayman Islands and BVI will continue to remain absolutely central to the global M&A markets as large numbers of SPACs incorporated offshore continue to seek merger targets. 

Key Takeaways

  • Although the IPO market has cooled, we continue to see considerable activity among already listed SPACs looking to make an acquisition. 
  • It was recently estimated by Goldman Sachs that there is $129 billion of undeployed capital sitting with SPACs seeking a merger target and it is projected that this will have a significant impact on international M&A markets, at least through to 2023. 
  • Cayman Islands and BVI incorporated SPACs comprise around 40 per cent of the SPACs that have listed in the US since the start of 2020, and will therefore play a pivotal role in this global M&A trend.
  • Offshore vehicles are incredibly attractive at the IPO stage of the SPAC lifecycle, and they are equally effective at the de-SPAC stage due to the Cayman Islands and BVI’s flexible corporate laws, which provide a range of deal structuring options

Click here to subscribe to our Legal Minds on Markets podcast. Choose your preferred platform from the list presented and click subscribe or follow once logged in.

Harneys produces a variety of podcasts, providing on-the-go legal analysis over the airways. Visit our Podcasts page to see them all.