The surge in SPACs can be attributed to the high quality of sponsors in the scene, says UBS executive
American finance specialists share with Israeli entrepreneurs their insights on the alternative path to Wall Street that has recently gained steam
“As the market has developed, a lot of really good companies have realized that a SPAC could be their best path to the public market, the best path to raising permanent capital. It is a quicker process with more certainty and if the operating partner, the company, and the SPAC partner have a good fit, there is a real value-added on both sides. Public investors have caught onto that, and you see SPACs receiving a really good reception from the public market when the transactions are announced,” Paul J. Zepf, Chairman and CEO of Global Partner Acquisition Corp II & Chairman of Purple Innovation Inc. said in a joint interview with Carlos Alvarez, Managing Director, Head of Specialty Finance and Head of Permanent Capital at UBS, at Calcalist’s conference dedicated to the recent surge in special purpose acquisition companies mergers.
“The quality of the sponsors that are now raising the SPACs, and Paul is a great example of that, has increased quite dramatically over the recent past. So now as public investors, there is a chance to bet on the sourcing and deal-making skills of sponsors such as Paul and I think that is attracting a lot of investors to the market. I would say as well that for the target companies that are looking to go public through a SPAC merger as opposed to a traditional IPO, the process is a little different and in some cases, it is a better fit for what the company is looking for,” Alvarez said, explaining the recent surge in SPAC deals.
Zepf and Alvarez went on to discuss the urgency to find the right partner to merge with given SPAC’s limited two-year shelf life, the types of companies that are suitable for such mergers, with an emphasis on the tech sector and their interest in what the Israeli ecosystem has to offer in terms of prospective companies.
They also shared their thoughts on the pros and cons of taking the SPAC route as far as the merging companies are concerned and whether they think this time SPACs are here to stay for the long-haul.