Morgan Joseph

SPACs are an active new investment class that is commanding increased market attention. Generally, SPACs are companies newly formed by management teams to acquire operating businesses. Over $14.8 billion has been raised by SPACs in the past four years.

Morgan Joseph is one of the leading underwriters of SPACs with over $2.3 billion in proceeds in 20 transactions, including acting as lead manager in 14 transactions.

SPACs are an interesting opportunity for both investors and management teams. Management teams are offered access to permanent equity capital via public markets with economics, which may be as much as 20% of post-acquisition common equity promote. Investors are offered access to management teams and private equity-like investment opportunities which can have investment protection, upside potential, and acquisition approval rights.

Morgan Joseph is a leading M&A advisor with respect to SPACs, representing both acquirers and target companies. In addition to our expertise as an underwriter of SPAC offerings, Morgan Joseph is familiar with all the unique issues related to completing a business combination with the SPAC structure having been involved in 5 SPAC M&A assignments representing over $1 billion in aggregate consideration. To date, 7 of the 14 offerings that Morgan Joseph lead managed have announced or closed an acquisition.

Morgan Joseph has developed private alternatives to public SPACs including a synthetic debt-based SPAC.

Morgan Joseph created the Morgan Joseph Acquisition Company Index (MJACI) which is quoted on Bloomberg. The MJACI is a total SPAC market index that measures the daily market performance of all publicly traded SPACs formed since August 2003.

Description of MJACI:

MJACI is a market capitalization weighted (excluding promote shares and over allotments) index. MJACI adds newly formed public acquisition companies at their initial offer price and removes an existing acquisition company upon consummation of a business combination. In either event, index weightings are linearly rebalanced. The index is set equal to a base of 100 as of January 1, 2005.

This material is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any specific securities. The material has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Morgan Joseph and/or its directors, officers and employees may have or may have had interests in, and may at any time make purchases and/or sales as principal or agent, or may have acted or may act as market maker, financial advisor or underwriter in SPACs. Morgan Joseph is under no obligation to update or keep current the information contained herein. The recipient is instructed to carefully review the prospectus for any specific SPAC prior to making any purchase of a SPAC and such prospectus information may vary from and supersedes any information herein.