SPACs, sometimes called blank-check companies, are shell businesses created to raise funds through an initial public offering, or IPO. They have no operations of their own and are primarily investment vehicles. SPAC managers use the funds raised through the offering to acquire a business looking to go public through a reverse merger.
The deals are often accompanied by private placements in public equity, or PIPE investments. In a SPAC PIPE, accredited investors such as investment firms and mutual funds buy large numbers of shares in a SPAC, typically at a discount, alongside its IPO. Most of Gores Group’s SPAC deals have included PIPE investment, indicating that the two new vehicles likely will as well.
The two Gores Technology Partners vehicles are the ninth and 10th SPACs formed solely by Gores Group. The firm has also co-sponsored two SPACs with serial investor and former Pabst Brewing Co. owner Dean Metropoulos.
Although a number of Gores SPACs have done well, the success of most of the firm’s vehicles are dwarfed by a mega-deal that took place last fall. The firm merged its fifth SPAC with mortgage lender United Wholesale Mortgage in a transaction valued at $16.1 billion. It was — and still is — the largest SPAC deal in history, setting a high bar for Gores going forward.
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