In the present volatile financial market conditions when access to liquidity is limited, special investment vehicles called SPACs are intensifying the competition for deals in the M&A landscape.

A flurry of merger and acquisitions by Special Purpose Acquisition Companies (SPACs) has been attracting special attention from Wall Street. The investment vehicles, historically formed by experienced and well-heeled financiers, have been steadily on the rise since the later half of 2007. SPACs or blank cheque firms are investment vehicles organized for the sole purpose of acquiring a future, as yet unidentified company. Even in the present volatile financial markets, these companies have been quite successful in sustaining a big chunk of M&A business.

They approximately accounted for 26% of the total Initial Public Offerings (IPOs) in 2007 and raised a total of $3.8 bn in 2008. With access to such large pools of capital, these companies have successfully implemented acquisitions. SPACs have proven enticing enough to draw some well-known personalities like Former Vice-President Dan Quayle who has joined the SPAC boards. Plus, they have appealed talent from Wall Street and beyond all seeking to cash in on the craze.

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