Hi guys
I’m not familiar with these. Is the financial modeling the same as modeling out any listed companies? Very limited experience in listed companies so don’t shoot me down. Take me as a noob.
SPAC - where a startup is looking to merge with a SPAC as a faster route to list compared to IPO. How does the model work?
PIPE and pre IPO - thoughts on how to model?
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IPO/Pre-IPO modeling is just DCF/Comps analysis. You take whatever valuation range you get from those, find the implied share PF for the transaction and throw that range into an Analysis at Various Prices/Transaction Matrix to show implied multiples and relative value to key comps.
SPAC is similar but you are also layering in a couple of deal/transaction structuring elements such as sponsor promote and whether they are going to give any of that up, warrant attach rate, etc.
Hi! Thanks for the reply. I guess for SPAC, it is the financial engineering portion that is different. Are there any materials/examples that talk more about these? Attach rate etc I have never seen one so I am finding it hard to visualise.
It's primarily focused on understanding what the ownership of the company looks like once it's SPACed. Most SPACs have warrants for example, typically 1/5, 1/4, 1/3 attached, something like that which will dilute shareholders. There is also the sponsor promote, as well as the PIPE investor shares.
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