While SPACs were once viewed as the back door route to going public, these days, the IPO alternative is mainstream. SPACs are in the news nearly every day as major companies are opting for the SPAC route to taking a company public. While they may be trendy, SPAC is still a complex process and one that requires ample preparation.
The following SPAC checklist of documentation and SPAC readiness information should help you navigate the SPAC process timeline with ease.
1. Legal
For compliance purposes, you'll need legal business documentation. This includes articles of incorporation plus any amendments, a list of business officers and the company's organization chart.
If you have multiple locations, you will need to provide the jurisdictions where you are qualified to do business and demonstrate proof of your authority within these locales.
2. Real Estate
Like legal documentation, you must provide all documentation related to company real estate.
Be prepared to show businesses taxes you have paid or any assessments on business properties.
Show any permits that relate to business premises such as the elevator permit or liquor license.
Provide copies of your deeds, titles, leases or other paperwork that shows your ownership or rental agreement for business property.
3. Employees
Provide comprehensive information for your employees including their status, salary and hire date. If you have a union, corporate bargaining agreement or something similar, include this information.
Don't forget to provide employee and HR practices such as the business manual, leverage policy and company agreements. To show how your employees relate to business health, deliver data on your company headcount, turnover and management data.
4. Operations and Governance
To enable SPAC partners to do their due diligence, provide all relevant operations and governance information. This includes meeting minutes, business valuation reports, compliance and regulatory documentation, business by-laws, business copyright or trademark for IP, and any relevant internal controls.
Don't forget about documentation for partners, vendors, consultants and other stakeholders that are of intrinsic interest to this deal.
5. Personal Property
Provide local, state, insurance and underwriters' reports for business property and business insurance policies.
Be prepared to explain workers' compensation claims, liability claims and other losses.
While you may think it's possible to hide compliance violations, the truth will rise to the surface. Instead, put this information in perspective.
6. Financial Information
Your business financial information is top of mind during any SPAC. Gather your cash flow statements, income statements, annual financial statements, business ledgers and relevant financial projections to paint the full portrait of your financial well-being. Other documents to gather include investment portfolios, tax returns, loans and a management letter that puts it all in perspective.
Next Steps
Effective SPAC readiness starts with understanding the moving parts of the process and leaving yourself enough time and resources to comply with the due diligence phases. SPACs have a compressed time frame relative to IPOs.
Once there is an agreement, your company needs to be ready to go in terms of producing the right documentation to keep the deal moving forward on the strict timeline. If the process cannot be completed within two years, the deal falls apart and your company is back to square one.
By understanding the SPAC steps and timeline via this SPAC checklist, you can work incrementally toward the process without missing a beat. To stay on track, look to DFIN's leading-edge SPAC to de-SPAC software to guide you through the SPAC listing process and beyond.
