Special purpose acquisition companies (SPACs) have become a popular alternative to traditional initial public offerings (IPOs) for bringing companies to public markets. Public relations (PR)—and strategic communications as a whole—plays a pivotal role in articulating the vision and value propositions of the companies involved, yet neither can be done effectively without alignment on a few core tenets. Here are the top quick-hit checklist items essential to handling PR around a SPAC:
- Understand the SPAC process: Familiarize yourself with how SPACs operate, from their initial public offering to their search for an acquisition target, through to the merger process and post-merger integration.
- Establish clear messaging: Be clear about the benefits of the SPAC merger, the potential for growth, the vision of the combined entity, and how it benefits stakeholders.
- Know the regulatory environment: SPACs, like all public companies, are subject to regulatory oversight. Ensure all PR material—to investors and otherwise—complies with securities regulations. Avoid making forward-looking statements that aren’t backed by reasonable assumptions or data.
- Manage expectations with transparency: SPACs often come with high expectations for growth and profitability. Ensure honest and open communication. Any perception of withholding information or being opaque can be damaging.
- Be conscious of your stakeholders’ concerns: Engage all relevant stakeholders—from current and potential investors to employees to the media. Each group may have unique concerns and questions about the SPAC process.
- Train executives for confident media engagements: Ensure that company spokespeople are well-trained to handle media interactions. They should be able to clearly communicate the company’s vision, the rationale behind the SPAC route to public listing, and address any skepticism or concerns.
- Craft and deliver a cohesive narrative: Craft a compelling story around the SPAC. Why this route instead of a traditional IPO? How does this benefit the company’s long-term strategy?
- Monitor sentiment: Keep a close watch on media coverage, investor sentiment and public opinion. Being responsive to concerns and misconceptions can prevent potential PR crises.
- Engage experts: Considering the uniqueness and complexity of SPAC transactions, it is wise to engage with PR agencies or consultants who have experience in SPAC communications. Expect your PR firm to have direct access to all senior parties of the deal, plus legal and IR representation. The level of tight interaction between these parties is essential for quality control.
- Provide consistent updates: Regularly update stakeholders on the SPAC process, from the initial announcement to the final stages of the merger. This keeps the narrative controlled and in line with the company’s messaging.
- Plan for the long term: While the SPAC process is time-bound, PR efforts shouldn’t stop post-merger. Continue to engage with stakeholders, media and the public to ensure a smooth transition and lay the foundation for the combined entity’s future PR initiatives.
- Address skepticism: Given the rapid rise in the number of SPACs, there’s been some skepticism around them. Address these concerns head-on and provide data-driven arguments to support the company’s decision.
Remember, as with any significant corporate action, the key to successful PR around a SPAC is a mix of proactive communication, transparency and stakeholder engagement.
