How have fairness opinions for SPACs evolved in the past two years? Our process has slightly evolved, but not significantly changed. We still perform the same methodologies, approaches, and rigorous due diligence. However, the biggest change to SPAC fairness opinions is the availability of information – specifically with regards to the financial projections that the target and the SPAC are willing to disclose to us and to the public shareholders. Many SPAC targets are pre-revenue or early revenue companies with little history. In 2021, SPACs would readily provide 5+ years of projections without hesitation. Now, with the potential removal by the Securities and Exchange Commission (SEC) of the Private Securities Litigation Reform Act of 1995 (PSLRA) safe harbor provisions around projections, SPACs and targets generally want to provide only limited projections or none at all. How do you perform a valuation without any projections? This is a question we deal with almost weekly. As with any valuation assignment – the answer is “it depends on the facts and circumstances of the assignment”. The general rule is that we need projections in some form. Whether the target develops the projections, or we do, generally one needs to forecast the company’s future performance profile to have a defensible valuation. If the company is prerevenue or very early revenue, no projections are provided, and the target will not cooperate with us in developing projections – Recently, Finance Monthly was delighted to speak with John Agogliati, Senior Managing Director, and Simon Koo, Director of Marshall & Stevens Transaction Advisory Services. Marshall & Stevens provides a full range of valuation services to deliver independent insights into the value of businesses, securities and assets for a multitude of purposes. John and Simon have been heavily involved in fairness opinions for Special Purpose Acquisition Company (SPAC) transactions since 2021. John was also featured in Finance Monthly in April 2022, explaining Fairness and Solvency Opinions. In that article, John explained, among other things, that the purpose of a fairness opinion is to independently determine if the transaction is fair from a financial point of view. Here, we follow up with a fascinating article concerning the hot topic of SPACs and Fairness Opinions. The biggest change to SPAC fairness opinions is the availability of information – specifically with regards to the financial projections that the target and the SPAC are willing to disclose to us and to the public shareholders. Finance Monthly. Banking & Financial Services 39
RkJQdWJsaXNoZXIy Mjk3Mzkz