Goldman Sachs has launched a new SPAC with a unique approach that aims to strike a balance between investors and insiders. The company recently facilitated the trading debut of Mirion Technologies as a SPAC following a merger. In contrast to traditional SPAC practices, Goldman Sachs is pioneering a more investor-friendly strategy with this initiative and plans to extend it to future projects as well. Unlike the usual model where sponsors receive 20% of total shares upfront at no cost, the new approach will grant this allocation only after the shares have appreciated by over 20% in value.
Tom Knott, the head of Goldman’s emerging SPAC business, explained the rationale behind this shift in a statement to CNBC, highlighting the potential biases that can arise when sponsors receive their share of the profits before the deal is completed.
With an investment of $200 million in the Mirion deal, Goldman seeks to level the playing field between typical investors and market insiders. This substantial investment also positions Goldman as the leading investor in public equity markets.
Goldman Sachs is trying to build a SPAC franchise with more investor-friendly deal structures.
Its $2.6 billion deal with Mirion fully defers promote and sponsors will only start getting paid when shares rise more than 20%. $MIR up 3% on NYSE debuthttps://t.co/TEpHhtXmwW
— Yun Li (@YunLi626) October 21, 2021
Knott emphasized that the goal is to establish a sustainable franchise in this space by prioritizing responsible transaction structuring and bringing high-quality businesses to the market. This commitment to excellence is aimed at ensuring long-term success and maintaining a competitive edge in the industry.
