A company with no commercial operations that are created just to raise capital through an initial public offering (IPO), to acquire an existing company, is a Special Purpose Acquisition Company (SPAC), or also known as a “blank check company.” These companies have been around for many decades but have become increasingly popular in the past few years. They have attracted many notable investors and raised a record amount of funds.
They’re generally created by sponsors or investors with expertise and experience in a specific industry, to pursue lucrative deals in that niche. Although the investors have at least one planned acquisition when creating a SPAC, that target isn’t identified to avoid detailed disclosures during the IPO process.
However, for public relations teams involved in SPAC, which can be referred to as a type of IPO, these teams have to follow a different set of rules to successfully execute the deal, especially in telling the company’s story through a strong PR campaign. Specifically, there are three key steps for PR agencies to communicate the client’s SPAC to the public and media outlets.
The first step in getting media coverage and publicity for a SPAC is to talk about it with key people — which is very different from traditional IPOs. A quiet period is necessary to mitigate the buzz around an upcoming offer. For SPACs, agencies should broadly communicate all the transaction benefits because this is the most compelling and critical moment in the media, and it’s the best way to generate buzz about the company.
The deal’s announcement has a lot of appeal in the press, and because SPACs have a very short timeline, campaigns should be utilized to maximize all press coverage about them. This media coverage can also provide momentum and further validation for the SPAC, which can help investors on both sides of the acquisition get together and have stakeholders’ buy-in and get all the necessary approvals needed to close the deal.
There is a short time frame between the announcement of the deal and when it’s finally closed when the SPAC has to actively market this transaction to the media, financial analysts, and current and potential investors. That’s why a big part of the campaign should be identifying new items and thought leadership pieces that can be pitched and placed during this period to further build on the momentum of the initial coverage and excitement around the deal.
Public Relations for SPAC’s: The Bottom Line
The last part of the campaign is announcing the closing of the deal — even though the IPO had already occurred when the SPAC was first set up and the money for the acquisition was raised. This is a very attractive story for media outlets, specifically for industry trade, local press, and reporters on Wall Street. To make the acquisition especially attractive to investors, a strong PR campaign is necessary for SPACs, who have a short timeframe and are in a very high stakes transaction.
Are you looking to gain media attention to your SPAC? Contact 5WPR today to learn how we can help boost your brand identity!