Legal Minds on Markets Harneys Offshore Law

In our second episode George Weston, Partner in our Corporate team in the BVI and an expert on ECM and M&A transactions, and Murray Roberts, Director at Harneys Fiduciary based on the US West Coast, discuss de-SPAC transactions and the options available for structuring business combinations where a SPAC is incorporated offshore.

Although the SPAC IPO boom witnessed throughout 2020 and Q1 2021 continues to taper off somewhat, the Cayman Islands and BVI will continue to remain absolutely central to the global M&A markets as large numbers of SPACs incorporated offshore continue to seek merger targets.

Key Takeaways

· The origins of SPACs and the spectacular rise of SPACs starting in 2019 and accelerating in the course of 2020.

· A rundown of the 3 stages of a SPAC lifecycle: (1) pre IPO planning and implementation; (2) the IPO itself; and (3) the resulting business combination.

· The advantages of using BVI or Cayman for a SPAC, including taking a look at investor familiarity and sentiment, flexible corporate laws, and a strong rule of law.

· FinTech and Healthcare are the most prominent sectors using BVI or Cayman as their place of incorporation.

· Over $80 billion was raised through SPACS in 2020, and we discuss whether SPACs will replace the role private equity has historically taken in driving M&A activity.

· We consider whether SPACs are democratising access to investments

· Discuss how other jurisdictions around the world are watching and responding to the SPAC boom in the US