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A Special Purpose Acquisition Company (SPAC) is a publicly listed investment vehicle created to merge with a private company and bring it onto a major stock exchange such as the Nasdaq or New York Stock Exchange (NYSE).

A SPAC is typically formed by experienced investors, investment bankers, or industry specialists who raise capital from institutional and third-party investors. These funds are placed into a protected trust account for up to two years while the SPAC searches for a suitable business acquisition or merger target.

If the SPAC does not complete a merger within the required timeframe, the SPAC is dissolved and investors receive their capital back from the trust account. However, the founding sponsors and principal investors generally lose the costs incurred in establishing and operating the SPAC, which creates strong motivation to complete a successful business combination.

Before any merger can proceed, SPAC shareholders must vote to approve the proposed transaction. Investors may also choose to redeem their shares and exit the SPAC before the merger is finalized.

The first step in preparing for a SPAC merger is establishing a strong business valuation, typically based on projected financial performance over the next three years.

This process involves:

• Preparing historical financial statements 
• Developing realistic financial forecasts 
• Demonstrating scalable growth potential 
• Identifying operational strengths and market opportunities 

A credible valuation is essential to attract SPAC interest and institutional investment.

A successful public listing requires comprehensive due diligence and corporate readiness.

This includes:

• Reviewing and resolving any operational, legal, or compliance risks 
• Ensuring financial records meet U.S. public company standards 
• Working with auditors that have a New York presence to streamline SEC compliance 
• Preparing for detailed SEC review and regulatory filings 

U.S.-based securities lawyers are typically required to liaise with the SEC throughout the review process, which can take approximately 2–3 months depending on the complexity of the transaction.

Professional fees for accountants, auditors, legal counsel, and regulatory advisors make up the majority of SPAC merger costs.

Typical transaction costs range between:

• USD $600,000 – $700,000 total 
• Approximately USD $400,000 – $450,000 may be reimbursable from the SPAC trust upon successful completion of the merger. 

Most SPACs generally seek companies with valuations starting from approximately:

• USD $200 million and above 

Higher valuations improve access to institutional investors and larger capital raises.

In many SPAC mergers, additional financing is required before closing the transaction. This may include:

• Replacement capital for redeeming shareholders 
• Bridge financing 
• PIPE financing (Private Investment in Public Equity) 
• Growth capital for post-merger expansion 

Companies typically retain majority ownership following the merger, often exceeding 60%, depending on the negotiated valuation and transaction structure.

Porche Capital has participated in multiple SPAC transactions and public market deals involving Asian and European companies over several decades.

Their role includes:

• Identifying suitable SPAC partners 
• Introducing companies to active SPAC sponsors 
• Structuring transactions to maximize valuation 
• Coordinating with auditors, lawyers, and SEC advisors 
• Managing workflow between all parties involved 
• Assisting with bridge financing and investor introductions 
• Supporting future capital raises and M&A opportunities post-listing 

Their experience helps reduce delays, improve efficiency, and position companies more effectively for U.S. public market investors.

A successful Nasdaq or NYSE listing can provide:

• Access to deep global capital markets 
• Increased international credibility 
• Institutional investor exposure 
• Future fundraising flexibility 
• Enhanced acquisition and expansion opportunities 
• Improved liquidity for shareholders 

A SPAC merger may enable companies to raise substantial equity and debt financing to accelerate long-term growth.

Before proceeding, management should evaluate whether the company is prepared to:

• Commit the required upfront transaction costs 
• Meet public company reporting standards 
• Undergo SEC review and regulatory scrutiny 
• Support long-term investor expectations 
• Execute a scalable growth strategy as a publicly traded company 

For companies seeking significant international capital access and long-term expansion opportunities, a SPAC merger can provide a strategic pathway to the U.S. public markets.