Despite the economic hurdles brought by the pandemic last year, 2020 saw an upsurge of initial public offerings (IPOs) through special purpose acquisition companies (SPACs). The sudden increase, which continued this 2021, has prompted the Securities and Exchange Commission (SEC) to better probe all related activities involving SPACs and ensure that these transactions are compliant with existing laws.
With the economic downturn that the pandemic has brought in the global business landscape, merger and acquisition (M&A) transactions have been an attractive option for many sectors and companies seeking to survive and easily adapt in a post-COVID-19 economy. However, apart from the opportunities M&A deals provide for businesses, these transactions also present several critical concerns that must be carefully considered and addressed. Now more than ever, companies and their lawyers must be conversant with important considerations and must be equipped with practical know-how before venturing into an M&A activity to ensure that risks are well mitigated.
Special-purpose acquisition companies (SPACs), also known as “blank-check companies,” have recently reemerged as a feasible acquisition vehicle for many private companies. The sole purpose of SPACs is to purchase other companies by raising capital through initial public offerings (IPOs).
As trends and developments in the mergers and acquisitions (M&A) market continue to totter, deals and transactions are up for another bustle of activities. Although M&A activities in 2019 are lesser compared to the previous years, dealmakers must properly navigate lessons learned to ensure excellent deal results in 2020. Additionally, a seamless M&A transaction management is another essential factor to be carried out.
As the volume of merger activities increases, regulators are also intensifying their crackdown on potential antitrust violations. Recognizing the insufficiency of traditional market share measures in revealing the potential competitive impact of a planned merger, governments and parties are now shifting to the assessment of purchasing decision processes instead. Customer surveys, carefully done, can provide a better way to understand consumer behavior and predict market outcomes post-merger.
The Rise of Special Purpose Acquisition Companies (SPACs): How to Minimize Securities Litigation RisksJoenel2021-09-02T04:19:57-04:00
The use of Special Purpose Acquisition Companies (SPACs) to raise capital through Initial Public Offering (IPO) is significantly becoming popular today because of its efficiency and cost-saving benefits. However, consequent to its rapid growth are stricter legal and regulatory probes from the SEC as well as other risk issues including negotiation time constraints and conflicts of interest that could create several threats of litigation.
Every year, new issues relating to mergers and acquisitions (M&A) continue to emerge along with the increasing volume of transactions. With COVID-19 further complicating the current landscape, dealmakers need to be equipped now more than ever to properly navigate potential risks.
The mergers and acquisitions (M&A) landscape is expected to become more active as businesses strive to position themselves for a better economic standing amid the uncertainties brought by the COVID-19 crisis. With the continuously emerging changes, M&A activities are anticipated to thrive in several business sectors including digital and technology, Environmental, Social, and Governance (ESG), IPOs, and consumer markets.
The ever-changing landscape of non-compete law continues to give rise to significant developments that companies need to be aware of. Recently, several new state laws have been adopted to limit non-compete agreements’ enforceability, thus, further complicating matters for employers. At the federal level, the Freedom to Compete Act has been introduced in the Senate to prohibit non-compete pacts for minimum wage earners. Moreover, with a pandemic in the backdrop, many other issues have also emerged.