Special Purpose Acquisition Companies (SPACs)
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Extensive Experience Completing Innovative Deals
Wilson Sonsini has an established track record of undertaking innovative transactions including SPAC IPOs and de-SPAC transactions.
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Top-Ranked Transactional Practices
Wilson Sonsini is able to advise SPACs throughout their lifecycle. The firm is top ranked in several corporate areas of practice, including capital markets, M&A, and public company representation.
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Deep Industry Expertise
Wilson Sonsini provides value-added legal services to technology, life sciences, and growth enterprises worldwide, as well as the investors that finance them.
What is a Special Purpose Acquisition Company (or SPAC)?
Special Purpose Acquisition Companies (SPACs) are publicly traded “blank-check” or “cash shell” companies that are formed and taken public through an IPO solely for the purpose of combining with a to-be-identified target company, the result of which is the target company becoming a public company via the “de-SPACing” process. Also:
- Cash proceeds raised in the SPAC IPO are held in trust until the de-SPACing merger occurs, and these proceeds can purchase shares from the target company shareholders or remain on the merged balance sheet; and
- a SPAC cannot have pre-identified a target at the time it files to go public.
A SPAC typically has a two-year term following IPO within which to consummate a merger.
SPACs frequently merge with targets at valuations ~2-4x + the amount raised in the SPAC IPO.
Finally, SPACs may also be used in connection with taking subsidiaries public through a “sponsored spin.”
Key Stages to Complete a de-SPAC Transaction
Our Capabilities
Recently, SPAC mergers have emerged with increasing frequency, driven at least in part by market volatility, but also inspired by successful SPAC transactions.
While history is one thing, expertise is another. Our firm has substantial experience representing late-stage companies as they consider exit alternatives, whether they elect to enter the capital markets through more traditional means or through other options including a de-SPAC transaction or reverse merger.
In September 2020, Wilson Sonsini represented QuantumScape Corporation, a developer of next generation solid-state lithium-metal batteries for use in electric vehicles, in a transaction with Kensington Capital Acquisition Corp., a SPAC, which resulted in QuantumScape becoming a publicly listed company.
As demonstrated in the QuantumScape transaction, our team brings together expertise from a broad range of disciplines, which enables us to offer comprehensive and coordinated counsel across all areas involved in sophisticated transactions.
As a leading corporate transactional practice, Wilson Sonsini has the scale and scope of experience that allows us to represent not only the companies considering a de-SPAC transaction, but also investors and sponsors seeking to form special purpose acquisition companies.
Our objective is to meet the complex needs of our clients—whatever their role in a SPAC transaction—and to maximize value to those who demand creativity, flexibility, and nimble execution from their legal counsel.
Overview
What is a Special Purpose Acquisition Company (or SPAC)?
Special Purpose Acquisition Companies (SPACs) are publicly traded “blank-check” or “cash shell” companies that are formed and taken public through an IPO solely for the purpose of combining with a to-be-identified target company, the result of which is the target company becoming a public company via the “de-SPACing” process. Also:
- Cash proceeds raised in the SPAC IPO are held in trust until the de-SPACing merger occurs, and these proceeds can purchase shares from the target company shareholders or remain on the merged balance sheet; and
- a SPAC cannot have pre-identified a target at the time it files to go public.
A SPAC typically has a two-year term following IPO within which to consummate a merger.
SPACs frequently merge with targets at valuations ~2-4x + the amount raised in the SPAC IPO.
Finally, SPACs may also be used in connection with taking subsidiaries public through a “sponsored spin.”
Key Stages to Complete a de-SPAC Transaction
Our Capabilities
Recently, SPAC mergers have emerged with increasing frequency, driven at least in part by market volatility, but also inspired by successful SPAC transactions.
While history is one thing, expertise is another. Our firm has substantial experience representing late-stage companies as they consider exit alternatives, whether they elect to enter the capital markets through more traditional means or through other options including a de-SPAC transaction or reverse merger.
In September 2020, Wilson Sonsini represented QuantumScape Corporation, a developer of next generation solid-state lithium-metal batteries for use in electric vehicles, in a transaction with Kensington Capital Acquisition Corp., a SPAC, which resulted in QuantumScape becoming a publicly listed company.
As demonstrated in the QuantumScape transaction, our team brings together expertise from a broad range of disciplines, which enables us to offer comprehensive and coordinated counsel across all areas involved in sophisticated transactions.
As a leading corporate transactional practice, Wilson Sonsini has the scale and scope of experience that allows us to represent not only the companies considering a de-SPAC transaction, but also investors and sponsors seeking to form special purpose acquisition companies.
Our objective is to meet the complex needs of our clients—whatever their role in a SPAC transaction—and to maximize value to those who demand creativity, flexibility, and nimble execution from their legal counsel.
Client Highlights
Wilson Sonsini Advises Plutonian Acquisition Corp. on Merger with Big Tree Cloud
On October 9, 2023, Big Tree Cloud International Group Limited (Big Tree Cloud), a company devoted to the development, production, and sales of personal care products and other consumer goods in China, and Plutonian Acquisition Corp. (Plutonian), a Nasdaq-listed special purpose acquisition company, announced that they have entered into a definitive agreement for a business combination between Big Tree Cloud and Plutonian. Upon the completion of the business combination, the combined company will become a publicly traded company on the Nasdaq Stock Market. The business combination reflects an initial equity value of approximately US$500 million for Big Tree Cloud.
Alerts
SPARCs: An Attractive Alternative to Traditional SPACs?
On September 29, 2023, the U.S. Securities and Exchange Commission (SEC) declared effective a registration statement for Pershing Square SPARC Holdings, Ltd., which is contemplating a unique variation on the traditional special purpose acquisition company (SPAC) structure. This variation, called a SPARC—or special purpose acquisition rights company—was spearheaded by billionaire investor Bill Ackman through his investment fund, Pershing Square Capital Management, L.P., and was designed to address several pain points for SPACs, which have lost popularity after frenzied activities in 2020 and 2021.
Client Highlights
Firm Advises Cheche Group Inc. on De-SPAC Merger with Prime Impact Acquisition I and Listing on Nasdaq
On September 14, 2023, Cheche Technology Inc., China’s leading automotive insurance technology platform, completed its business combination (Business Combination) with Prime Impact Acquisition I, a publicly traded special purpose acquisition company formerly listed on the New York Stock Exchange. Starting September 18, 2023, the combined company, Cheche Group Inc. (Cheche), will become a publicly listed company and its shares and warrants will begin trading on the Nasdaq Capital Market under the symbols “CCG” and “CCGWW,” respectively. Wilson Sonsini Goodrich & Rosati is representing Cheche in the Business Combination and Nasdaq listing.
Client Highlights
Firm Advises Scage International on Business Combination with Finnovate
On August 21, 2023, Scage International Limited (Scage International), a zero-emission solution provider in China focused on new energy heavy-duty commercial vehicles and e-fuel solutions, and Finnovate Acquisition Corp. (Finnovate), a publicly traded special purpose acquisition company, announced that they have entered into a definitive agreement for a business combination between Scage International and Finnovate. Upon the completion of the business combination, the combined company, Scage Future, will become a publicly traded company on the Nasdaq Stock Market. The transaction represents a post-combination valuation of $1.0 billion for Scage International, subject to adjustment.
Client Highlights
Firm Advises YS Biopharma on De-SPAC Merger with Summit Healthcare Acquisition Corp. and Listing on Nasdaq
On March 16, 2023, YS Biopharma Co., Ltd. (YS Biopharma) completed the business combination with Summit Healthcare Acquisition Corp. (Summit Healthcare), a publicly traded special purpose acquisition company (the merger). From March 17, YS Biopharma will become a publicly listed company and its shares and warrants will begin trading on the Nasdaq Capital Market under the symbols “YS” and “YSBPW,” respectively.
Blog Posts
Delaware Court of Chancery Issues Two Opinions in the SPAC Context
In recent weeks, the Delaware Court of Chancery has issued two noteworthy opinions in the special purpose acquisition company (SPAC) context—one related to fiduciary duties and one related to the technical question of when a class or series of stock is entitled to its own separate vote on a charter amendment. These opinions provide valuable insight into how the courts may view common elements of de-SPAC transactions and also have broader implications for practice.
Insights
Client Highlights
Wilson Sonsini Advises Plutonian Acquisition Corp. on Merger with Big Tree Cloud
On October 9, 2023, Big Tree Cloud International Group Limited (Big Tree Cloud), a company devoted to the development, production, and sales of personal care products and other consumer goods in China, and Plutonian Acquisition Corp. (Plutonian), a Nasdaq-listed special purpose acquisition company, announced that they have entered into a definitive agreement for a business combination between Big Tree Cloud and Plutonian. Upon the completion of the business combination, the combined company will become a publicly traded company on the Nasdaq Stock Market. The business combination reflects an initial equity value of approximately US$500 million for Big Tree Cloud.
Alerts
SPARCs: An Attractive Alternative to Traditional SPACs?
On September 29, 2023, the U.S. Securities and Exchange Commission (SEC) declared effective a registration statement for Pershing Square SPARC Holdings, Ltd., which is contemplating a unique variation on the traditional special purpose acquisition company (SPAC) structure. This variation, called a SPARC—or special purpose acquisition rights company—was spearheaded by billionaire investor Bill Ackman through his investment fund, Pershing Square Capital Management, L.P., and was designed to address several pain points for SPACs, which have lost popularity after frenzied activities in 2020 and 2021.
Client Highlights
Firm Advises Cheche Group Inc. on De-SPAC Merger with Prime Impact Acquisition I and Listing on Nasdaq
On September 14, 2023, Cheche Technology Inc., China’s leading automotive insurance technology platform, completed its business combination (Business Combination) with Prime Impact Acquisition I, a publicly traded special purpose acquisition company formerly listed on the New York Stock Exchange. Starting September 18, 2023, the combined company, Cheche Group Inc. (Cheche), will become a publicly listed company and its shares and warrants will begin trading on the Nasdaq Capital Market under the symbols “CCG” and “CCGWW,” respectively. Wilson Sonsini Goodrich & Rosati is representing Cheche in the Business Combination and Nasdaq listing.
Client Highlights
Firm Advises Scage International on Business Combination with Finnovate
On August 21, 2023, Scage International Limited (Scage International), a zero-emission solution provider in China focused on new energy heavy-duty commercial vehicles and e-fuel solutions, and Finnovate Acquisition Corp. (Finnovate), a publicly traded special purpose acquisition company, announced that they have entered into a definitive agreement for a business combination between Scage International and Finnovate. Upon the completion of the business combination, the combined company, Scage Future, will become a publicly traded company on the Nasdaq Stock Market. The transaction represents a post-combination valuation of $1.0 billion for Scage International, subject to adjustment.
Client Highlights
Firm Advises YS Biopharma on De-SPAC Merger with Summit Healthcare Acquisition Corp. and Listing on Nasdaq
On March 16, 2023, YS Biopharma Co., Ltd. (YS Biopharma) completed the business combination with Summit Healthcare Acquisition Corp. (Summit Healthcare), a publicly traded special purpose acquisition company (the merger). From March 17, YS Biopharma will become a publicly listed company and its shares and warrants will begin trading on the Nasdaq Capital Market under the symbols “YS” and “YSBPW,” respectively.
Blog Posts
Delaware Court of Chancery Issues Two Opinions in the SPAC Context
In recent weeks, the Delaware Court of Chancery has issued two noteworthy opinions in the special purpose acquisition company (SPAC) context—one related to fiduciary duties and one related to the technical question of when a class or series of stock is entitled to its own separate vote on a charter amendment. These opinions provide valuable insight into how the courts may view common elements of de-SPAC transactions and also have broader implications for practice.
Affiliated Programs
SPACs in 2021: Part 2
Wilson Sonsini will join the Nasdaq Entrepreneurial Center and partners for a virtual event, SPACs in 2021. Special purpose acquisition companies (SPACs) are continuing to show growth in 2021, and this year's numbers have already surpassed the volume seen in 2020. A SPAC business combination can offer a quick and lucrative transaction for unlisted sellers, as well as provide an efficient way to tap the public equity markets, but there are a multitude of complex challenges and key considerations involved.
Speaking Engagements
NY/NJ NASPP Chapter Meeting - SPACs: A Primer
Selling to a SPAC can offer a quick and lucrative transaction for unlisted sellers, as well as provide an efficient way for private companies to tap public equity markets, but there are a number of key considerations, as SPACs involve a multitude of complex challenges.
Michael Nordtvedt, head of Wilson Sonsini’s capital markets practice, will provide an overview of SPACs, including:
• SPAC basics
• Recent trends
• Pros and cons
Michael Nordtvedt, head of Wilson Sonsini’s capital markets practice, will provide an overview of SPACs, including:
• SPAC basics
• Recent trends
• Pros and cons
Affiliated Programs
SPACs in Cleantech
Join Wilson Sonsini and co-hosts Silicon Valley Bank and Cleantech Group for an interactive webinar that will give you expert insight into the impact of SPACs on the global sustainable innovation and investment landscape. Get answers to your pressing questions: How is the 2020 trend evolving in 2021? What are the reports from the people involved? Where are experts looking next? Whether you’re an entrepreneur, investor, corporate change maker or policy expert committed to building the path from chaos to transformation, this interactive webinar will give you:
WSGR Events
SPACs, IPOs, and Direct Listings: Alternative Public U.S. Exit Strategies for European Tech Companies
As the U.S. exit landscape continues to evolve, alternative approaches—such as SPACs—are making U.S. IPOs accessible to a wider array of European companies. SPAC business combinations have recently offered private companies a potentially efficient way to raise funding at attractive valuations. However, while initially appealing, related factors such as outcome, opportunity, and underlying risks require careful consideration, especially as this red-hot industry faces new challenges ahead.
Affiliated Programs
ACC Austin's Webinar: M&A Trends: SPACs and IP Issues in M&A Transactions
Wilson Sonsini will sponsor the ACC-Austin webinar on “M&A Trends: SPACs and IP Issues in M&A Transactions.” Special purpose acquisition companies (SPACs) continue to show growth in 2021 and the de-SPAC process continues to provide private companies the opportunity to access public equity markets. Wilson Sonsini will provide an update on SPAC business combinations, including deal trends and new developments. The presentation will also include a discussion of key intellectual property and commercial contracts issues in M&A transactions. The topics covered will help in counsel prepare for future M& A transactions.
Affiliated Programs
SPACs in 2021
Special Acquisition Companies (SPACs) raised more than $75 billion in 2020, and are continuing to show growth in 2021. SPAC business combinations have provided another option for sellers, as well as an efficient way for private companies to tap public equity markets, but there are a number of key considerations. Selling to a SPAC can offer a quick and lucrative transaction for unlisted sellers, but also requires a multitude of complex challenges. Join experts from Nasdaq, KPMG, Wilson Sonsini, and Woodruff Sawyer, as they examine the uptick in SPACs in 2021 and share insights on what private companies should know about this path to going public.
Events
Affiliated Programs
SPACs in 2021: Part 2
Wilson Sonsini will join the Nasdaq Entrepreneurial Center and partners for a virtual event, SPACs in 2021. Special purpose acquisition companies (SPACs) are continuing to show growth in 2021, and this year's numbers have already surpassed the volume seen in 2020. A SPAC business combination can offer a quick and lucrative transaction for unlisted sellers, as well as provide an efficient way to tap the public equity markets, but there are a multitude of complex challenges and key considerations involved.
Speaking Engagements
NY/NJ NASPP Chapter Meeting - SPACs: A Primer
Selling to a SPAC can offer a quick and lucrative transaction for unlisted sellers, as well as provide an efficient way for private companies to tap public equity markets, but there are a number of key considerations, as SPACs involve a multitude of complex challenges.
Michael Nordtvedt, head of Wilson Sonsini’s capital markets practice, will provide an overview of SPACs, including:
• SPAC basics
• Recent trends
• Pros and cons
Michael Nordtvedt, head of Wilson Sonsini’s capital markets practice, will provide an overview of SPACs, including:
• SPAC basics
• Recent trends
• Pros and cons
Affiliated Programs
SPACs in Cleantech
Join Wilson Sonsini and co-hosts Silicon Valley Bank and Cleantech Group for an interactive webinar that will give you expert insight into the impact of SPACs on the global sustainable innovation and investment landscape. Get answers to your pressing questions: How is the 2020 trend evolving in 2021? What are the reports from the people involved? Where are experts looking next? Whether you’re an entrepreneur, investor, corporate change maker or policy expert committed to building the path from chaos to transformation, this interactive webinar will give you:
WSGR Events
SPACs, IPOs, and Direct Listings: Alternative Public U.S. Exit Strategies for European Tech Companies
As the U.S. exit landscape continues to evolve, alternative approaches—such as SPACs—are making U.S. IPOs accessible to a wider array of European companies. SPAC business combinations have recently offered private companies a potentially efficient way to raise funding at attractive valuations. However, while initially appealing, related factors such as outcome, opportunity, and underlying risks require careful consideration, especially as this red-hot industry faces new challenges ahead.
Affiliated Programs
ACC Austin's Webinar: M&A Trends: SPACs and IP Issues in M&A Transactions
Wilson Sonsini will sponsor the ACC-Austin webinar on “M&A Trends: SPACs and IP Issues in M&A Transactions.” Special purpose acquisition companies (SPACs) continue to show growth in 2021 and the de-SPAC process continues to provide private companies the opportunity to access public equity markets. Wilson Sonsini will provide an update on SPAC business combinations, including deal trends and new developments. The presentation will also include a discussion of key intellectual property and commercial contracts issues in M&A transactions. The topics covered will help in counsel prepare for future M& A transactions.
Affiliated Programs
SPACs in 2021
Special Acquisition Companies (SPACs) raised more than $75 billion in 2020, and are continuing to show growth in 2021. SPAC business combinations have provided another option for sellers, as well as an efficient way for private companies to tap public equity markets, but there are a number of key considerations. Selling to a SPAC can offer a quick and lucrative transaction for unlisted sellers, but also requires a multitude of complex challenges. Join experts from Nasdaq, KPMG, Wilson Sonsini, and Woodruff Sawyer, as they examine the uptick in SPACs in 2021 and share insights on what private companies should know about this path to going public.
Megan J. Baier
Partner
Megan represents technology and life sciences clients in corporate transactional matters.
Mark B. Baudler
Partner
Mark is a corporate law veteran, having advised start-ups and mature public companies for more than 25 years.
Steven V. Bernard
Partner
Steve has represented non-U.S. and domestic companies in U.S. IPOs, global securities offerings, cross-border M&A, and SEC compliance for more than 25 years.
Richard C. Blake
Partner
Richard has a comprehensive corporate law background, with extensive experience in public offerings.
Jonathan Chan
Partner
Jonathan represents technology-driven clients in corporate and transactional matters.
Weiheng Chen
Partner
Weiheng leads Wilson Sonsini's Greater China practice and he focuses on capital markets, M&A, and private equity transactions.
Michael E. Coke
Partner
Michael represents technology-driven clients in corporate, securities, and related transactional matters.
Colin G. Conklin
Partner
Colin G. Conklin is a partner in the San Francisco office of Wilson Sonsini Goodrich & Rosati, where his practice focuses on public and private offerings of securities for issuers and underwriters, SEC reporting, corporate governance and general corporate counseling of emerging growth technology and life sciences companies.
Michael J. Danaher
Partner
Mike has more than 20 years of experience representing technology and life sciences companies in corporate matters.
Brian Dillavou
Partner
Brian Dillavou is a corporate partner in the Austin office of Wilson Sonsini Goodrich & Rosati, where he represents start-ups and emerging growth companies from incorporation and early-stage financings through strategic exits such as initial public offerings and mergers and acquisitions. His experience includes advising start-up and early-stage businesses on corporate legal issues, venture capital and other financings, stock options and other compensation matters, mergers and acquisitions, and capital markets transactions, including initial public offerings. He also represents institutional investors and financial institutions in venture capital financings, mergers and acquisitions, and capital markets transactions, including initial public offerings and other equity and debt financings. Brian has particular experience working with clients in the technology, fintech, and life sciences sectors.
People
Megan J. Baier
Partner
Megan represents technology and life sciences clients in corporate transactional matters.
Mark B. Baudler
Partner
Mark is a corporate law veteran, having advised start-ups and mature public companies for more than 25 years.
Steven V. Bernard
Partner
Steve has represented non-U.S. and domestic companies in U.S. IPOs, global securities offerings, cross-border M&A, and SEC compliance for more than 25 years.
Richard C. Blake
Partner
Richard has a comprehensive corporate law background, with extensive experience in public offerings.
Jonathan Chan
Partner
Jonathan represents technology-driven clients in corporate and transactional matters.
Weiheng Chen
Partner
Weiheng leads Wilson Sonsini's Greater China practice and he focuses on capital markets, M&A, and private equity transactions.
Michael E. Coke
Partner
Michael represents technology-driven clients in corporate, securities, and related transactional matters.
Colin G. Conklin
Partner
Colin G. Conklin is a partner in the San Francisco office of Wilson Sonsini Goodrich & Rosati, where his practice focuses on public and private offerings of securities for issuers and underwriters, SEC reporting, corporate governance and general corporate counseling of emerging growth technology and life sciences companies.
Michael J. Danaher
Partner
Mike has more than 20 years of experience representing technology and life sciences companies in corporate matters.
Brian Dillavou
Partner
Brian Dillavou is a corporate partner in the Austin office of Wilson Sonsini Goodrich & Rosati, where he represents start-ups and emerging growth companies from incorporation and early-stage financings through strategic exits such as initial public offerings and mergers and acquisitions. His experience includes advising start-up and early-stage businesses on corporate legal issues, venture capital and other financings, stock options and other compensation matters, mergers and acquisitions, and capital markets transactions, including initial public offerings. He also represents institutional investors and financial institutions in venture capital financings, mergers and acquisitions, and capital markets transactions, including initial public offerings and other equity and debt financings. Brian has particular experience working with clients in the technology, fintech, and life sciences sectors.
Recent Insights
Client Highlights
Wilson Sonsini Advises Plutonian Acquisition Corp. on Merger with Big Tree Cloud
On October 9, 2023, Big Tree Cloud International Group Limited (Big Tree Cloud), a company devoted to the development, production, and sales of personal care products and other consumer goods in China, and Plutonian Acquisition Corp. (Plutonian), a Nasdaq-listed special purpose acquisition company, announced that they have entered into a definitive agreement for a business combination between Big Tree Cloud and Plutonian. Upon the completion of the business combination, the combined company will become a publicly traded company on the Nasdaq Stock Market. The business combination reflects an initial equity value of approximately US$500 million for Big Tree Cloud.
Learn More
Alerts
SPARCs: An Attractive Alternative to Traditional SPACs?
On September 29, 2023, the U.S. Securities and Exchange Commission (SEC) declared effective a registration statement for Pershing Square SPARC Holdings, Ltd., which is contemplating a unique variation on the traditional special purpose acquisition company (SPAC) structure. This variation, called a SPARC—or special purpose acquisition rights company—was spearheaded by billionaire investor Bill Ackman through his investment fund, Pershing Square Capital Management, L.P., and was designed to address several pain points for SPACs, which have lost popularity after frenzied activities in 2020 and 2021.
Learn More
Recent Events
Affiliated Programs
SPACs in 2021: Part 2
Wilson Sonsini will join the Nasdaq Entrepreneurial Center and partners for a virtual event, SPACs in 2021. Special purpose acquisition companies (SPACs) are continuing to show growth in 2021, and this year's numbers have already surpassed the volume seen in 2020. A SPAC business combination can offer a quick and lucrative transaction for unlisted sellers, as well as provide an efficient way to tap the public equity markets, but there are a multitude of complex challenges and key considerations involved.
Learn More
Speaking Engagements
NY/NJ NASPP Chapter Meeting - SPACs: A Primer
Selling to a SPAC can offer a quick and lucrative transaction for unlisted sellers, as well as provide an efficient way for private companies to tap public equity markets, but there are a number of key considerations, as SPACs involve a multitude of complex challenges.
Michael Nordtvedt, head of Wilson Sonsini’s capital markets practice, will provide an overview of SPACs, including:
• SPAC basics
• Recent trends
• Pros and cons
Michael Nordtvedt, head of Wilson Sonsini’s capital markets practice, will provide an overview of SPACs, including:
• SPAC basics
• Recent trends
• Pros and cons
Learn More
Newsletters
The 2022 Mid-Year Technology and Life Sciences "Non" IPO Report
In this latest edition, we provide an analysis of the state of the IPO market during the first half of 2022 (or lack thereof); practical advice for companies that are currently in registration or are planning to pursue an IPO once market conditions become more favorable; and an overview of alternative financing trends, including private financings, alternatives to equity financings, special purpose acquisition companies (SPACs), reverse mergers, and M&A exits.
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