How SPACs Can Use Outsourcing To Drive Better Results

A SPAC is a special type of public company designed to facilitate large, fast-paced acquisitions. A SPAC, or special-purpose acquisition company, is a subsidiary of an existing shell company launched with an IPO for capitalising on growth opportunities and then exiting quickly.

With the help of an experienced transaction service provider, SPACs can outsource many functions related to becoming a public company. By outsourcing some or all of these tasks, the typical timeline can be reduced to 3-6 months versus 9-12.

Here are some ways in which SPACs use outsourcing to improve their results:

Support in the Preparation Stage: During a SPAC transaction, outsourcing firms perform due diligence. The client focuses on raising capital and selecting the right management team and board of directors while the outsourcing firm takes care of the rest.

Taxation Management: SPACs have complex structures, requiring extremely comprehensive tax planning expertise to ensure tax compliance. Specialised taxation experts can help plan how to take advantage of the various incentives and exemptions available to the SPAC. Outsourcing firms liaise with the company’s professional advisers (including investment bankers) to ensure the deal structure is tax-efficient.

Implementation of Customised Technology: Technology support is vital to the successful implementation of any accounting or enterprise resource planning (ERP) system. Outsourcing firms offer SPACs a comprehensive technology solution that includes the installation, configuration, training and post-implementation support necessary to ensure deadlines are met with efficiency and precision. By combining services with the company’s internal expertise, outsourcing firms deliver a highly effective technology solution, financial statement closing and reporting requirements.

Operational Expertise: With a team of experts across the human resources, finance, technology and legal fields, SPAC support for investment banks, offers help in charting the operational roadmap. With hands-on experience in both private and public organisations, outsourcing firms help in designing a high-quality future-state organisational structure and identifying qualified candidates.

Faster Processes: With an accelerating pace of business, SPACs require faster decision-making. Quick turnaround times, streamlined processes and accurate information and decisions are needed. This enhanced pace can exhaust a company, and this is where outsourcing firms step in. Outsourcing firms have robust processes to handle deals with the utmost accuracy and reliability.

Valuation Services: Conducting a valuation is not a simple task. It involves an array of constantly evolving fields and technologies that are intricately related to the specifics of the business being valued, including engineering and operations, technology, taxation, accounting, environmental issues and other competing businesses. Whether the SPAC firm needs a non-profit valuation or an appraisal of various types of business assets, outsourcing firms offer precise analysis based on the latest technique and industry standards.

Outsourcing helps reduce the time and costs involved in conducting transactions to prepare and position the SPAC for successful listing.

Partnering with a SPAC outsourcing company is the best option amid high market disruptions. Outsourcing services are offered by experienced industry professionals who offer significant SPAC support, especially for investment banks.