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SPECIAL PURPOSE ACQUISITION COMPANIES Numerical
A SPAC raises $200 million in its IPO at $10 per unit. If the trust earns 4% annual interest and the SPAC takes 18 months to complete a merger, how much is in the trust at the time of the business combination?
The trust would hold approximately $212 million ($200 million × 1.04^1.5). Interest accrued in the trust is typically included in the merger consideration or returned to shareholders.
A SPAC raises $150 million at $10/share; trust earns 3% annually. What is the per-share redemption value after 12 months?
$10.30 per share after 12 months at 3% annual interest.
A SPAC has 20 million public shares at $10 each and sponsors hold 5 million founder shares (promote). If a merger is completed at a $250 million enterprise value, what percentage do sponsors hold post-merger assuming no redemptions?
Sponsors hold 5 million out of 25 million total shares, representing 20% ownership post-merger. The founder shares (promote) are typically set at 20% of post-IPO public shares as compensation to the SPAC sponsor.
A SPAC has 25 million public shares at $10 and sponsors hold 6.25 million founder shares. What is the sponsor promote percentage?
Sponsors hold 20% founder shares as promote.
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