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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