Companies merging with Spacs face challenges around valuations and controls

Finance executives at businesses merging with special purpose acquisition companies face hurdles preparing for valuation work and setting up internal controls within a short space of time, as US regulators ramp up their scrutiny of such deals.

Spacs, which are in essence large pools of cash, offer private companies a faster route to the public markets compared with other forms of listings such as an initial public offering. Through 11 April, 23 companies combined with Spacs in the US, up from 19 during the prior-year period, according to data provider Refinitiv. Last year, 54 of these transactions closed, totaling $76.7bn in value, Refinitiv said.