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SPAC Overview
SPAC vs. Alternatives
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A SPAC is a compelling alternative to both a traditional IPO and a traditional sale:
| SPAC vs. Traditional IPO |
| Higher certainty of closure |
- 42 of 45 (93%) SPACs voted upon have closed (4 additional SPACs ran out of time)
- 109 of 149 (73%) healthcare IPOs filed from 1/01/05 to 6/30/07 have priced
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| Greater valuation certainty |
- SPAC transaction valuation determined in definitive merger agreement and rarely changes
- Of the 109 healthcare IPOs filed between 1/01/05 and 6/30/07 that priced, 78 IPOs (72%) priced below the midpoint of the range with a mean discount of 15% and a median discount of 17%
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| Timing is comparable |
- 5 – 7 months to file proxy and close SPAC transaction; average (non-China) SPAC closed in 6.3 months from signing of merger agreement
- Similar timeframe for IPOs (5 to 7 months) with 1 to 2 months to file S-1 and 4.7 months average from first filing to IPO pricing
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| Aftermarket research and trading support |
- Potential for aftermarket research and trading support from KBL’s lead underwriters, Citi and Jefferies, as well as M&A advisors (if applicable)
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| SPAC vs. Traditional Sale |
| Potential for higher valuation |
- Public markets generally value on forward multiples
- Take advantage of private to public arbitrage
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| Ability to maintain upside post-deal |
- Seller can take publicly-traded stock for part of purchase price
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| Less disruption to the business |
- Management stays in place with independent board of directors and no controlling shareholder(s)
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Greater flexibility
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- Ability to accommodate divergent shareholder liquidity preferences
- Can use mix of cash and stock, earn-outs, deal with complex capital structures, etc.
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KBL Healthcare Acquisition Corp. III
380 Lexington Avenue, 31st Fl.
New York, NY 10168 |
Ph: (212) 319-5555
Fax: (212) 319-5591
Inquiries: inquiries@kblhealthcare.com |
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