In SPACs, Dealers See Viable Option to Go Public

Corporate Services Partner Stephen Dietrich spoke with Automotive News about franchised automotive dealerships going public through special purpose acquisition companies (SPACs). SPACs are companies with no commercial operations that are formed to raise capital through an initial public offering (IPO) in order to acquire other companies. Also known as "blank-check companies," they dramatically increased in 2020, and Mr. Dietrich commented that several of his clients have begun exploring options in this area. Some advantages of SPACs include providing quick access to capital for a growing group and offering an exit for a family-owned group without a successor. Mr. Dietrich cautioned, however, that going public also means adhering to more stringent regulatory requirements and answering to a board of directors.

"It's a whole other layer of administration to be a public company," he explained.

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