July 25, 2021

The Spacs, these financial UFOs that are on the rise

What can a former Ivorian banker in Switzerland and an Egyptian billionaire have in common? A priori nothing, but with the new fashionable investment vehicles in the largest financial center in the world, namely Wall Street, there is no need to look very long. Tidiane Thiam, the former chairman of Credit Suisse and Nassef Sawiris have both just launched a Special purpose acquisition company (Spac), that is to say an acquisition company with a specific vocation.

This type of company created especially to raise funds is so successful in the United States that it was the subject of a rap track by hip-hop singer Cassius Cuvée. A single in which he says that it is enough to invest little and pick up a jackpot in the end.

In reality, a Spac is a company created from scratch and whose sole purpose is to raise funds to acquire one or more other companies, before merging with them. It is therefore a high-level financial operation, very technical, but which brings enormous benefits to its promoters.

Sawiris and Thiam are the first two Africans to ride the Spacs wave. Thus, last November, the Egyptian raised some 600 million dollars in New York thanks to his Spac Avanti, the purpose of which was expressly to make acquisitions in Europe.

For her part, Tidiane Thiam raised some 345 million dollars during the listing of its Spac in New York, with the aim of rapidly acquiring companies in the finance or new technologies sector.

It should be noted that one of the advantages of a Spac is precisely to be listed on the stock exchange from its creation. This is what makes it possible to rapidly increase the value of the assets acquired, especially if they were not listed. Indeed, a company listed on a stock exchange is necessarily better valued. This is what makes Spacs so successful and what drove Cassius Cuvée to fall madly in love with them.