Term · Capital Measures & Financing
De-SPAC
In briefA de-SPAC is the completion of the merger between a SPAC and the target company, which is then continued as a listed company. For smaller de-SPACs, the actual capital base is often far lower than the original SPAC size.
Definition
Completion of the takeover/merger between a SPAC and the target company, after which the target company continues as a listed company.
How it is calculated
Formula. Calculate the pro-forma equity value and cash after redemptions, fees, warrants, and PIPE.
Why it matters for small caps
For small-cap-like de-SPACs, the actual capital base is often much lower than the original SPAC size.
Common misreadings
- It is judged by the announced valuation; more important are cash runway, dilution, and realistic forecasts.
In the process
Frequently asked
What is a de-SPAC?
It is the combination of a SPAC with its target company. Afterward the operating company itself is listed.
How do you assess a de-SPAC?
You calculate the pro-forma equity value and the cash after redemptions, fees, warrants, and PIPE. Only that shows the real capital base.
Why does the announced valuation often deceive?
It is readily made the benchmark, even though cash runway, dilution, and realistic forecasts are more important. After redemptions, significantly less capital often remains.
Related terms
Sources
Primary
Bundesministerium der Justiz – Aktiengesetz (AktG)
https://www.gesetze-im-internet.de/aktg/
https://www.gesetze-im-internet.de/aktg/
Methodology
EUR-Lex – EU-Prospektverordnung, Verordnung (EU) 2017/1129
https://eur-lex.europa.eu/eli/reg/2017/1129/oj
https://eur-lex.europa.eu/eli/reg/2017/1129/oj
Education only, not investment advice. Ranges and thresholds are didactic orientation values, not an official standard.