Special purpose acquisition company is called special purpose acquisition company, which literally translates as special purpose M&A company. As the name implies, a special purpose acquisition company is the sponsor of the sponsor, usually a listed cash shell company made by an investment institution in advance for the acquisition. Special purpose acquisition company is a unique form of listed company in American capital market. Different from the traditional IPO or backdoor listing, its innovation lies in shell financing first, then mergers and acquisitions, and finally the target of mergers and acquisitions is listed companies.
The listing method of special purpose acquisition company has the characteristics of fast time, low cost, simple process and guaranteed financing. The listing of a company through special purpose acquisition means that the target company only needs to merge with the listed entity, which is of great benefit to both investors and the target company. The traditional IPO method needs to complete the process of selecting intermediaries, submitting materials to the CSRC and the exchange, and pricing roadshows, which is more complicated.