Going public with a SPAC

Is a SPAC right for you?

Chances are you navigated to this page because you are considering executing a merger with a special purpose acquisition company (SPAC). Or maybe you want to learn more about these types of mergers. Either way, you’ve come to the right place. Deloitte has a dedicated SPAC practice with experienced specialists who can advise you on the nuances of using a SPAC to go public. Read on for valuable resources designed to educate you on the SPAC merger process.

How Deloitte can help

Deloitte’s SPAC services team has advised companies around the world and helped them successfully navigate the SPAC lifecycle—from pre-deal preparation through execution and post-IPO services.

The differences between going public via SPAC merger and a traditional IPO

Up-front pricing
Additional capital
Avoiding exposure

Understanding the SPAC lifecycle

  • Identify lead investment and M&A lawyers
  • Develop forecasting model, develop story, and evaluate your company’s valuation
  • Meet with potential SPAC suitors to gauge SPAC bake-off
  • Identify an advisor to project manage the process and help develop the deal timeline
  • Begin preparing Reg S-X/Reg S-K public company financial statements and footnotes and hire an auditor to perform an audit under PCAOB standards
  • Begin tax planning strategies

Letter of Intent (LOI)

  • Negotiate key deal terms, including earnout arrangements
  • Agree on merger timeline with SPAC, advisors, and external auditors based on critical workstreams
  • Conduct employee education and communication around the SPAC transaction and around being a public company

Private Investment in Public Equity (PIPE)

  • Prepare PIPE presentation, including Key Performance Indicators (KPIs), identification of non-GAAP measures and reportable segments
  • Facilitate diligence review by prospective PIPE investors
  • Negotiate PIPE terms with potential investors
  • Obtain definitive commitments for the PIPE concurrent with the execution of the business combination agreement (i.e., combined public announcement), if possible

SEC reporting considerations

  • Analyze accounting treatment to determine accounting acquirer
  • Determine accounting for existing share- based awards, convertible equity and debt, etc. and any related impacts based on definitive merger agreement
  • Draft MD&A and market risk disclosures
  • Prepare Form S-4/proxy information, including pro forma financial information for minimum and maximum redemption scenarios
  • Respond to SEC comments and file Form S-4/A

Thriving as you transition from going public to being public

  • Optimize finance and accounting operations to meet SEC reporting timelines
  • Implement new technologies (e.g., Workiva, Blackline, NetSuite, etc.)
  • Develop governance framework (e.g., Board and committee requirements)
  • Refine tax strategy and risk management and controls
  • Document organizational policies and procedures
  • Advance Investor Relations (IR) strategy and organization capabilities
  • Implement Sec 302/906 certification programs

SPAC considerations

You’ll certainly want to consult an advisor and fully consider some of the risks and opportunities inherent in the process. Some of these complexities can lead to potential pitfalls if not managed adequately.

Compressed timeline for public company readiness

As the target company, you will need to focus on being ready to operate as a public company within four to seven months of signing a letter of intent. The accounting and reporting requirements to do so are the same as an IPO, but in a much shorter timeframe.

Competition for targets

The recent flurry of SPAC launches means the demand for target companies is on the rise. At the start of 2022, nearly 580 SPACs were looking for targets. This competition for targets may put you in a stronger position when performing the due diligence required to select the right SPAC suitor and execute a deal.

Uncertainty during the due diligence process

The regulators have continued to challenge the amount of due diligence performed by SPAC sponsors which has proved difficult to navigate as different banks, SPAC sponsors, and due diligence providers all expect differing levels of diligence.

Understanding share dilution

SPAC sponsors typically own a 20 percent stake in the SPAC through founder shares in addition to warrants to purchase more shares. The retail investor also holds warrants. As the SPAC and target work towards a business combination agreement, share dilution becomes a key negotiation point of the SPAC. Additional shares may be issued to the target and/or PIPE investors, or the founder shares (shares issued in the original SPAC IPO) may be reduced.

Capital shortfall from potential redemption

Initial SPAC investors may redeem their shares. If redemptions exceed expectations, then cash availability becomes uncertain. If the SPAC requires additional funds to complete a merger, the SPAC may issue debt or additional shares, such as a private investment in public equity (PIPE) deal.

Potentially challenging regulatory process

The SEC continues to ask for enhanced disclosures regarding the transactions. Our SPAC-experienced teams can provide advice and recommendations to management in light of recent trends. We can also help you answer comments quickly to help accelerate your transaction.

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Deloitte services

Deloitte’s SPAC professionals can help manage complexities and nuances throughout the SPAC lifecycle. Our specialists have extensive experience in the accounting, reporting, and project management tasks required to navigate the fast-moving process of going public via SPAC merger.

Pre-deal preparation

After helping you decide if a SPAC is the best vehicle for your company, Deloitte can assist you in navigating pre-deal preparation activities, including:

  • Audit readiness and support for a PCAOB audit
  • Quarterization of financial statements
  • SEC disclosure preparation
  • Calibration of accounting processes and internal controls
  • Tax planning

Deal execution

When it’s time to execute the deal, Deloitte has the experience to help you navigate each part of the transaction while minimizing risk and surprises. Our execution services include*:

  • LOI and merger negotiation
  • Tax structuring
  • Public company financial statements
  • MD&A
  • Transaction accounting
  • Pro forma financial statements

Post-IPO Services

Following the SPAC merger, your company faces a new set of challenges. Operating as a public company requires new people, policies, and processes—many of which must be undertaken from the first day of trading or in the days immediately after the SPAC merger closes. Deloitte can help with these post-IPO activities, which include*:

  • Accounting pronouncement and interpretations
  • Reporting regulations and nuances
  • Investor relations
  • SOX and internal controls
  • Technology and transformation
  • Corporate governance and ESG
  • Tax regulation and ongoing compliance



* Deloitte helps manage these post-IPO activities, many of which must be undertaken from the first day of trading, or in the days and weeks immediately after the de-SPAC transaction. Our specialists can help make operating as a public company as smooth as possible during the transition and well beyond.


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For questions or a detailed discussion on how we can help you, please contact us below.

 SPACs in general
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Get in touch

Will Braeutigam

Will Braeutigam

US Capital Markets Transactions Leader | Deloitte & Touche LLP

Will is a partner and the US Capital Markets Transactions leader at Deloitte & Touche LLP. In this role, he leads Accounting & Reporting Advisory (ARA) offerings related to IPO, SPACs, Acquisitions an... More

Barrett Daniels

Barrett Daniels

US IPO Services Co-Leader | Deloitte & Touche LLP

Barrett is an Audit & Assurance partner in Deloitte & Touche LLP's Accounting and Reporting Advisory practice located in the Bay Area as well as the US IPO Services Co-Leader. For the better part of t... More

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