What EY can do for you

Our EY professionals began focusing on SPACs more than a decade ago, well before they became a “mainstream” alternative for companies looking to access the capital markets. Since then, our integrated, independent and objective teams have assisted on more than 100 SPAC transactions and counting across various target company industries, as well as 20-plus cross-border transactions. We have been involved in 14 of the 20 highest total equity value deals completed since 2016, according to SPAC Research.

Our breadth of experience encompasses transactions that involve umbrella partnership corporations (Up-Cs), carve-outs, multiple targets and other complex structures. Our deep-rooted experience and extensive history navigating the opportunities and risks of the SPAC market, combined with our market leadership in taking companies public, uniquely positions EY professionals to help SPAC sponsors and target companies evaluate opportunities, make transactions more efficient and achieve their strategic goals.

Chart of understanding the SPAC life cycle

What we can do for you

At Ernst & Young LLP, we have a dedicated practice that supports SPACs and target company leadership teams from identification through post de-SPAC. Our breadth of experience encompasses transactions that involve Up-C, carve-outs, multiple targets and other complex transaction structures.

Throughout every phase of the SPAC life cycle, we’ll provide independent capital markets perspectives to boards and management teams on all elements of deal preparation, process, execution and after-market considerations. Our professionals leverage decades of experience from bookrunning IPOs, SPACs and various other capital markets transactions to provide a full spectrum of advisory services across equity capital products and strategies, giving clients tailored advice and integrated, unbiased recommendations across the capital structure.

  • SPAC support

    Advise SPACs and SPAC sponsors on deal considerations and requirements

    • Define the deal structure and consider alternative acquisition structures (reverse a cash merger, tax-free reverse merger, Up-C and other partnership structures) and the tax costs/benefits
    • Provide perspectives on term sheets
    • Analyze and comment on business combination agreement
    • Assist with financing agreements and supporting schedules/disclosures, SPAC transaction documents, stockholder agreements and more

    Provide SPAC sponsors dedicated support through de-SPAC transaction

    • Advise on pro forma financial statements and disclosures
    • Review carve-out financial statements of target entity or entities
    • Prepare technical accounting memos
    • Support in responses to SEC comment letters
    • Prepare fairness opinions and other valuation needs
    • Strategize on a transaction tax and post-acquisition tax step plan
    • Advise on private investment in public equity (PIPE) and debt financing
    • Assist with SEC filings such as Forms 10-K, 10-Q, 8-K (including tax considerations)
    • Draft tax opinion(s), statement of facts and representations

  • Target company support

    Assist with company readiness planning and preparation

    • Establish funding and liquidity objectives
    • Understand process timelines and scenarios
    • Align stakeholders around objectives and timing
    • Review and develop corporate and tax structure
    • Conduct enterprise-wide IPO readiness assessments across functions
    • Assist with workforce and compensation planning
    • Establish an enterprise-wide IPO readiness road map
    • Formalize corporate governance framework (including environmental, social and governance (ESG) considerations)
    • Fine-tune business plan and equity story

    Provide ongoing support to newly public company

    • Assist with SEC filings such as Forms 10-K, 10-Q, 8-K (including tax considerations)
    • Support Sarbanes-Oxley (SOX) Act compliance
    • Support technology assessments and system implementations
    • Develop process improvement plans
    • Advise on complex accounting requirements, internal audit co-sourcing, external auditor controls testing, digital audit readiness and more

    Advise on long-term value refinement

    • We help you focus on future growth, including opportunities to invest in the core business, reduce leverage, improve working capital, expand and operationalize ESG, and more.

  • Specialized support for SPACs and target companies

    Complete all required buy-side and sell-side due diligence

    • Execute buy-side due diligence for the SPAC and sell-side due diligence for the operating company including commercial, financial risk, human resources, IT, transaction tax, fairness opinions and more.

    Provide a project management office (PMO)

    • Support readiness assessments/road maps and timeline guidance/sequencing, working group coordination, governance and risk management, dependencies with other initiatives, and shareholder communications. 

The evolutionary rise of the SPAC is transforming and reshaping our capital markets. Regardless of market conditions, we are here to help you navigate your journey.

Navigating the requirements for merging with a SPAC

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