Michael Dell and executives from his family office have formed MSD Acquisition Corp., a Special Purpose Acquisition Company (SPAC) that's pursuing an IPO (initial public offering) valued at roughly $575 million, and hunting for potential merger and acquisition (M&A) targets.Details about Michael Dell's SPAC -- also known as a blank-check company -- surfaced in an SEC filing.Michael Dell will serve as a strategic adviser to the SPAC. The management team includes three executives from his family office -- John Cardoso, Gregg Lemkau and John Phelan. The trio manage some $19 billion for Dell’s family, SeekingAlpha notes.The SPAC may seek M&A deals in any sector, though the management team has experience across technology and media. Also of note: The SPAC will not invest in Dell Technologies' principal markets.ChannelE2E believes SPAC organizations may acquire MSP software companies as soon as this year (2021).Still, some pundits believe we’re heading toward a SPAC bubble — which involves too much money potentially flowing to lower-quality companies that perhaps shouldn’t be publicly held.For more details, check out this List of Technology SPACs, which ChannelE2E updates regularly.
SPAC Opportunities and Potential Bubble Concerns
A SPAC or “blank check” company is designed to raise funds in an initial public offering (IPO) with the aim of acquiring a private business. That private company then becomes public as result of the merger, Reuters notes. Or as Investopia puts it:“The founder of a SPAC pools money from investors and he or she may contribute to the SPAC to form a blank check company with the sole purpose of acquiring another company—or companies. The money raised through the IPO of a SPAC is put into a trust. The funds are held until the SPAC successfully identifies a viable merger or acquisition opportunity to pursue with the invested funds.”
