These 6 lawyers are helping engineer the $40 billion SPAC boom with new innovations for shareholder voting and how big investments are lined up
One-hundred and twelve SPACs, aka "blank-check firms," have raised more than $40 billion so far this year. There's an entire ecosystem of advisors, salespeople, and lawyers increasingly pitching blank-check companies.
The SPAC space wouldn't have developed into what it is today without the work of lawyers who've been at the head of table for some of the market's most important innovations. Business Insider spoke with industry insiders to come up with a list of the current market's most influential legal advisers. One of Wall Street's most talked-about trends is the wave of special-purpose acquisition companies, or SPACs, that have launched IPOs at such a torrid pace that they're on track to raise more than triple last year's totals. One-hundred and twelve SPACs, aka "blank-check firms," have raised more than $40 billion so far this year — compared to 59 last year that raised less than $14 billion — according to the website SPAC Research. There are now 183 shell companies with $57 billion to spend on bringing other companies public, the data provider said. More than the money is that the vehicles are now seen as a viable alternative for companies looking to go public in a way that they haven't ever been before. Famed Silicon Valley investor Bill Gurley, an outspoken proponent for rethinking the traditional IPO process, lent his support to SPACs in a recent The companies, which initially have no revenue or operating assets, raise money from investors by selling shares, typically for $10. They then put that money into a trust until it's time to buy another company.SoftBank-backed Opendoor lost $339 million in 2019. Here's how it's pitching a path to profits as it gears up to go public via a SPAC. The development of the SPAC market over the past few years is often credited to the sponsors of the vehicles, the people who launch them in return for a stake in the merged company once the SPAC has found a willing seller. In recent months boldface names like hedge-fund titan Bill Ackman, LinkedIn founder Reid Hoffman and Silicon Valley power player and Dragoneer Investment Group founder Mark Stad have raised funds for SPACs. Ex-Citigroup investment banker Michael Klein completed the largest SPAC-led merger in history this year. But there's also an entire ecosystem of advisors, salespeople, and lawyers increasingly pitching blank-check companies to investment platforms and wealthy people. Asset managers like Fidelity, T. Rowe Price, and Capital Research are also increasingly participating in the market, lending an additional aura of respectability to what had once been considered a back corner of the financial markets.Read our full list of the 16 bankers, lawyers, and capital providers helping engineer a $40 billion blank-check craze that's fast-tracking companies to public markets As the market has gained more respectability, the names of the players driving its growth have changed. Business Insider spoke with industry insiders to come up with a list of the current market's most influential legal advisers. The SPAC space wouldn't have developed into what it is today without the work of lawyers who've been at the head of table for some of the market's most important innovations. One change that opened up the market nearly a decade ago was separating the redemption process from the shareholder vote on approving the merger. Another key area mentioned by those Business Insider spoke with has been around the private investment in public equities, or PIPE, investments that help cement the merger.As SPACs have gone more mainstream, they've attracted some of the larger, diversified, well-known law firms.Among the most savvy of the newer entrants, according to people Business Insider spoke with, Davis Polk has gone from doing a couple of SPAC offerings a year to representing underwriters on over a dozen IPOs — and at least one issuer, VG Acquisition, that filed for a $400 million offering on September 16. The firm's practice is led by Derek Dostal. A banker who's worked with Dostal said he's likely the "most thoughtful" lawyer out there because "he thinks about the product." The firm primarily advises underwriters, handling $7.5 billion worth of deals so far in 2020. Those include vehicles sponsored by Bill Foley, former Blackstone exec Chinh Chu, and True Wind Capital.Ellenoff Grossman & Schole Even as SPACs grow in popularity and acceptance, some of the original law firms are hanging on. One of those is EGS, a longtime player in the SPAC market after setting out to develop a focus on the space. Led by Doug Ellenoff, the firm has done hundreds of IPOs, including recent representations of underwriters such as FTAC Olympus Acquisition, which raised $750 million, and sustainability-focused Northern Genesis Acquisition. It's also done work for issuers like TWC Tech Holdings II, the second SPAC backed by True Wind Capital, and Vesper Healthcare Acquisition, a $400 million vehicle led by the former CEO of Allergan.Greenberg Traurig, too, has a long history in SPACs. Alan Annex, who cochairs the firm's corporate practice, highlighted its role in the development of the "Crescent term," a warrant price-adjustment provision that is now common. The firm also worked on the Prisa transaction in 2010, which decoupled a shareholder's ability to vote on a proposed merger from the ability to cash in one's shares, known as the redemption, which reduced the risk of a merger being rejected. "There are a lot of regulatory things around the SPAC that will change from time to time, but there's also been changes to the product," he said.Greenberg has worked on at least seven SPAC offerings this year, according to SPAC Research. Major M&A mandates include representing Nebula Acquisition in its tie-up with financial risk analytics company Open Lending and helping VectoIQ, which also tapped Greenberg for its IPO, strike a deal to take the electric-truck company Nikola public.
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