Alec Gores strikes again with biggest SPAC merger to date

The SPAC boom just became a little bigger. Gores Holdings IV, a special-purpose acquisition company that raised $425 million at the start of the year, has agreed to combine with United Wholesale Mortgage in a reverse merger that will value the mortgage origination provider at roughly $16.1 billion, marking the largest SPAC merger on record, the company said.

Egregious Founder Shares. Free Money for Hedge Funds. A Cluster***k of Competing Interests. Welcome to the Great 2020 SPAC Boom.

It’s a brilliant, blue-sky afternoon in mid-August, and Bill Ackman is enjoying being, well, Bill Ackman.

Maybe it’s the sun. Or maybe it’s the aftermath of his latest tour de force — the IPO of a $4 billion special-purpose acquisition company, or SPAC, the largest of its kind during a year when such blank-check deals are exploding.

5 things you need to know about…SPACS

SPACs (special purpose acquisition or “blank cheque” companies) have recently regained prominence in the US, with H1 2020 seeing record-breaking levels of activity, both in terms of value (Bill Ackman’s $4bn Pershing Square Tontine is the largest SPAC IPO to date, eclipsing previous records) and volume (SPACs accounted for around 30% of all US IPOs in H1 2020). One of the reasons for the revived interest is that experienced founder teams can benefit from a dislocated market to find good opportunities that yield attractive returns.