Conference American Bar Association - SPACs are dead; long live the de-SPAC! With Alexander Olliges.
3 May 2023 - Sheraton New York - Learn more here_

Quick access: What is a SPAC? | Luxembourg for your SPAC | Arendt by your side in the launch of your SPAC | Related content (videos, events, trainings, etc.)

Arendt’s track record in SPACs

– July 2023 - Successful De-SPACing transaction in difficult market environment - 468 closes their second De-SPAC transaction
– January 2023 - Successful European de-SPAC transaction in difficult market environment (GFJ ESG Acquisition I SE)
– July 2022 - Arendt has assisted Kalera in its business combination with Agrico Acquisition Corp. and subsequent Nasdaq listing
– June 2022 - Alvotech dual-listing completed
– February 2022 - Arendt & Medernach advised SMG European Recovery SPAC SE and its management team on its SPAC
– February 2022 - Arendt & Medernach advised GP Bullhound in a EUR 200 million private placement and admission of listing on the Euronext Amsterdam of its first SPAC
– January 2022 - Arendt & Medernach advised 468 Capital and its management team on its second SPAC and its EUR 210 million private placement
– December 2021 - Arendt assisted Alvotech with all Luxembourg law aspects of a business combination (de-SPACing) with Oaktree Acquisition Corp. II
– November 2021 - New successful business combination for Luxembourg-incorporated and Frankfurt listed SPAC
– October 2021 - New Luxembourg-incorporated SPAC with ESG focus launched
– September 2021 - Arendt has assisted in a de-SPAC transaction in the international healthcare industry involving Luxembourg - Procaps
– September 2021 - Arendt & Medernach has assisted Lakestar SPAC I SE in relation to the business combination with HomeToGo GmbH
– July 2021 – Arendt has assisted on one of the first de-SPAC transactions involving Luxembourg
– May 2021 – Arendt & Medernach advised the sponsors of OboTech Acquisition SE on its IPO on the Frankfurt Stock Exchange
– May 2021 – Arendt & Medernach advised the sponsors of 468 SPAC I SE on its IPO on the Frankfurt Stock Exchange
– February 2021 – Arendt & Medernach advised the sponsors of Lakestar SPAC 1 SE in its IPO on the Frankfurt Stock Exchange

Table of contents

1. What is a SPAC?

2. Luxembourg for your SPAC

3. Arendt by your side in the launch of your SPAC

4. Related content (videos, events, trainings, etc.)

1. What is a SPAC?

SPAC stands for “special purpose acquisition company”, also known as a “blank cheque company”. They originated in the US, where they have since become a hugely popular investment product. In 2021 the SPAC really began to make its mark in Europe as well, first taking hold in vibrant financial centres like Luxembourg.

A SPAC is a listed vehicle with the objective of acquiring, through a so-called “business combination”, one privately held company or group (a target generally selected based on an investment strategy focused on a certain sector and region). The business combination allows the target company to go public without passing through the traditional IPO process. If no suitable target can be found within two to three years, the SPAC must be liquidated.

The shareholders vote on the specific business combination, which is implemented in a process commonly referred to as “de-SPACing” and can take the form of merger(s), sale, contribution in kind or other means.

Typically, the SPAC issues two types of instruments: shares and warrants. The shares are split into public shares (listed and held by investors) and sponsor shares (not listed, but convertible into public shares under certain conditions). Often, 80% of the units go to public shareholders and 20% to the sponsor(s). In addition, the SPAC will normally issue sponsor warrants. The subscription price of the sponsor shares and sponsor warrants covers the cost of the de-SPACing process.

Sponsors are usually HNWIs (former CEOs of MNCs), but can also be investment firms, hedge funds or PE funds. The funds invested by the public shareholders are held in an escrow account, with the goal of being refundable to the investors at 100% if (i) no target is found within the two to three-year de-SPACing period, and/or (ii) the investors decide at the time of the business combination not to invest in the target. De-SPACing transactions are often coupled with additional issuances of rights through rounds of private (PIPE) fundraising to enable the SPAC to reach a larger acquisition target.

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2. Luxembourg for your SPAC

Located at the heart of Europe and with its strong framework of legal, tax and other regulations, Luxembourg is the ideal drop point for new SPACs.

• Reliable corporate law environment
• SPAC-aware regulatory authorities
• Financial centre offering stability and cross-border expertise
• Precedent of Luxembourg listed companies on all major stock exchanges
• Market infrastructure in place to support sophisticated products and innovation
• Onshore reputation for European structures for post de-SPAC listing – everything can be done from Luxembourg!

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3. Arendt by your side in the launch of your SPAC

Always on the lookout for wise innovation, Arendt began early on to offer legal advisory services helping SPAC sponsors achieve their goals. The firm now has a solid track record with various SPAC and de-SPAC transactions (examples above).

We assist sponsors with the listing on different stock exchanges including Frankfurt, Amsterdam, New York and NASDAQ, which each present their own specificities. Arendt thus has knowledge and in-depth experience of all of the processes that contribute to the efficient creation of a SPAC as well as the know-how to assist with the subsequent de-SPACing process.

Beyond this, SPACs require significant expertise in a cluster of fields already well represented at Arendt:

Corporate Law, Mergers & Acquisitions

- structuring
- incorporation
- governance matters
- coordination with dedicated service providers and Luxembourg authorities
- issuance of different categories and types of shares and warrants
- prospectus review and drafting
- mergers and demergers
- share and asset acquisition
- reorganisation
- due diligence
- agreements

Key contacts: Sébastien Binard, Bob Calmes, Guy Harles, Alexander Olliges, Carsten Opitz, Laurent Schummer

Capital Markets

- prospectus drafting and review
- coordination with regulators
- initial public offerings
- listing and settlement
- ad hoc and major shareholding notifications
- link to different stock exchanges

Key contact: François Warken

Investment Management/Private Equity

- analysis of SPAC eligibility for alternative investment fund status under the AIFMD and support with all related questions
- assistance with review of SPAC documentation, in particular the prospectus, to facilitate qualification as an alternative investment fund

Tax Law

VAT and more

Key contact: Jan Neugebauer

Arendt Services

- domiciliation
and more

contact us: SPAC@arendt.com

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4. Related content (videos, events, trainings, etc.)

Past events... stay tuned for upcoming sessions!

> 08/07/21 - Webinar - Arendt Lunchbreak Lecture (German)
> 12/07/21 - Webinar - De-SPAC: Bulls-eye or way off target?

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