Sound program and project management are key to SPAC success
Special purpose acquisition companies (SPACs) – companies that exist only to raise capital through an initial public offering (IPO) to acquire an existing private company and take it public – are on the rise. These companies, which have no commercial operations of their own, raised over $83 billion in 2020, and have already passed $97 billion in 2021, according to SPACInsider.
This trend has created a surge of new activities for CFOs and their teams to manage. In addition to general IPO readiness and normal course of business operational/financial activities, SPAC responsibilities include transaction diligence projects, compliance reviews, numerous fundraising efforts, and additional reporting as required by legal and financial institutions. This creates a critical need to appoint a responsible party to oversee all concurrent workstreams, often with extremely narrow timelines. In many instances, SPAC-related projects are time-sensitive, and may require the team to work backward from an estimated transaction date, which itself can be a shifting goalpost.
The overall success of a SPAC effort – and even the degree to which it is successful – is largely dependent upon having a sound program management framework. Depending on the volume initiatives and the culture of the organization, the framework can be adjusted. Just like there are different sizes of houses, there are different levels of project management, not a one-size-fits-all model.
A program framework is composed of the critical foundational elements laid out in the project planning: Established cadence, communication strategy/management, project management, risk management, decision management, and change management.
Effective project management involves always looking ahead to plot out the path to drive toward the next milestone, the next activity, the next week, the next month, while effectively identifying and managing issues, documenting decisions, and mitigating risk – using the RAID Management Framework, short for Risks, Assumptions, Issues, and Dependencies Management.
CohnReznick has deep expertise in managing large-scale projects with different work streams, deliverables, and activities in flight, and the appropriate organization and eagle-eye focus on the details, while also being mindful of driving toward the strategic objectives. Our advisors help companies address complex issues by providing practical, proven, and cost-effective project management solutions that allow organizations to focus on their mission and achieve more.
InsightESG in alternative investments: Perspectives on aligning interests, reporting, and building a true ESG commitmentRead perspectives on reporting, aligning investor-manager interests, and building a true commitment to environmental, social, and governance (ESG) issues.
InsightWhat to prepare today for tomorrow’s exit: The importance of sell-side due diligenceAsael Meir, Alex CastelliRead how early-, growth-, and late-stage companies should prepare for a potential M&A transaction or capital raise.
InsightCapital Markets Insights – June 2021Explore timely insights for fund managers, investment teams, and portfolio executives. This issue features topics that include infrastructure, SPACs, and hospitality value creation.
InsightSPACs for clean energy IPO: Better option or bubble?Special purpose acquisition companies (SPACs) exploded in popularity in 2020 as an alternative pathway to the traditional IPO to access public markets. An increasing number of SPACs targeting energy transition industries have emerged, creating new opportunities for clean energy companies to fuel their growth by going public.
Case StudyCASE STUDY: Helping private companies in the renewable energy sector get IPO-readyRead how CohnReznick helped a company prepare for the initial and subsequent filing requirements that would come with going public through a SPAC transaction.