2021 has been a big year for Special Purpose Acquisition Companies (SPACs). As of May 2021, more than $100 billion has been raised in SPAC public offerings. However, SPAC issuances often come with communications challenges. SPACs are shell companies organized by sponsors and structured to move to IPO and a subsequent merger with, or acquisition of, an existing operating company within 24 months. This process raises a very big question for communicators — how do you successfully communicate about and market a SPAC when your end target company is unknown?
That is the question we recently asked Carolyn Saacke, COO of Capital Markets at the New York Stock Exchange; Matt Higgins, CEO of RSE Ventures and CEO of Omnichannel Acquisition Corp.; and Don Duffy, President of ICR.
Here are our experts’ five key tips for SPAC communications success:
1. Understand that you have a short window for communication at the start of the process.
SEC regulations govern communication around the formation of the SPAC and the IPO. This means while PR teams and communicators are limited in the material that can be shared, they still need to differentiate the SPAC from others in a crowded market. There is also a limited time to generate interest.
Since the end company has not been identified, the initial announcement is very important. It is imperative that the team understands the SEC requirements around SPAC-related communications. The initial announcement should include who the management team is, the sector you are targeting and why readers should believe in the established vision.
2. Develop a strategy for the period between listing and closing a deal.After the initial listing announcement, the SPAC organization gets to work on the deal, finding and negotiating with the operating company it intends to merge with or acquire. This is the time during the communications process when deal-related news is limited.
One of the best things SPAC communications teams can do during this time is to create an in-depth FAQ for all relevant audiences. While some questions may not be ready for sharing, this exercise allows you to align your SPAC process with your messaging to ensure you are ready to go public.
3. Navigate the shareholder vote process thoughtfully.
Keeping all the SPAC shareholders involved and informed as the SPAC moves towards a potential deal with a company is vital for the communications process. This means communicators need to create a “get out and vote” messaging campaign to drive shareholders to participate in the voting process.
This can be done with press releases that capture retail investor attention, participation in panels or investor conferences and webcasts that often include non-institutional holders. It is very important for communicators to promote the record dates and vote dates as widely as possible, much more than they would for a non-SPAC public company shareholder vote.
4. Deliver an impactful deal announcement.
Often referred to as the “de-SPAC,” how PR teams handle the merger announcement is critically important to the venture's success. At this point, the company is required to file a press release, a presentation, and a transcript of the presentation under SEC requirements. Our experts urged public relations and investor relations teams to identify all of the potential audiences they need to reach, including research teams, buy-side accounts, sell-side participants, SPAC industry journalists and experts, and the general public, and to define the messaging and actions each group will require to be kept informed about what’s happening and the future of the new company.
5. Know how to measure the success of SPAC communications.
While participants may be interested in different metrics, our experts recommended three measurements to monitor the effectiveness of communications around a SPAC transaction:
- Share price performance relative to cash
- Volume of shares traded through the process
- Amount of research coverage
Filing for a SPAC is the start of a long journey. Smart communicators can plan ahead to maximize the impact of their announcements by understanding what they can and cannot share, driving participation in the vote process and creating a strategy that allows you to communicate the right answers to each individual audience.
Complete the form below and we’ll send you our upcoming whitepaper as soon as it’s available.