By Moira Conlon for CFO Magazine
Messaging delivered in an IPO or transaction of any type sets the tone for the long term and must be carefully crafted.
While SPAC transactions have long been considered a last resort way to go public, they are now thriving and represented about half of all IPO issuance so far in 2020. Today’s special-purpose acquisition company deals have been validated by numerous high- profile sponsors, established and successful private companies leveraging the structure to go public, and top-tier institutional investors and investment banks participating in these transactions.
Nevertheless, the SPAC structure is unique. From a communications perspective, there are important nuances companies should consider. In our experience, establishing a strong investor relations foundation and leveraging best-in-class investor communications from the start are critical competitive advantages for companies entering the public market through SPAC transactions.
Get ready to be a public company. Companies going public in a SPAC transaction find it especially challenging due to the compressed time frame relative to a traditional IPO. Keep in mind that the average length of time from signing a letter of intent (LOI) to announcing a business combination is just a few months.
Regardless of how a company goes public, management must understand what it means to be a public company and have the infrastructure, systems, and resources in place. That includes establishing a robust IR foundation that includes everything from creating public company policies and protocols to a state-of-the-art IR website for launch on listing day. When investors and the press ask you why you decided to go public via a SPAC, the best answer is: “We had always intended to go public and were public-company-ready when we made the decision.” That proof of concept should be supported by the quality of company communications and confident interaction with these audiences.