HERE, from Torys LLP, is a good summary of special purpose acquisition companies (SPACs) both in the US and Canada.

A SPAC is as publicly traded shell company organized to acquire an unknown target in the future.  It is typically intended to be a ‘blind pool’ and investors purchase the IPO shares based on the founders’ credibility and experience.  Once an acquisition target is identified, the target goes public by completing a reverse take over of the SPAC.

HERE is a guideline for how SPACs work on the TSX.  The TSX-V has a similar program with its Capital Pool Companies.

Posted by Scott Sinclair,  Managing Director, Range Advisors

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