A special purpose acquisition company (SPAC) is a company that has no commercial operations and is formed to raise capital through an initial public offering (IPO). It is an investment structure that is set up especially to make an acquisition or a buyout.They are also called “blank check companies.” The only aim of a SPAC is to raise capital via an IPO to acquire a business at a later date and then take it public without going through the traditional route of IPOs.The amount of money raised through SPAC IPOs in the US since 2014 is as given below:· 2014: $1.8bn across 12 SPAC IPOs· 2015: $3.9bn across 20 SPAC IPOs· 2016: $3.5bn across 13 SPAC IPOs· 2017: $10.1bn across 34 SPAC IPOs· 2018: $10.7bn across 46 SPAC IPOs· 2019: $13.6bn across 59 SPAC IPOs· 2020: $83.3bn across 248 SPAC IPOsHistory of SPACsThe SPACs have existed since the 1990s in the technology, healthcare, logistics, media, retail, and telecommunications industries. They began with investment bank GKN securities with founders David Nussbaum, Roger Gladstone, and David Miller, who developed the template.Since 2003 the SPACs witnessed a resurgence, and public offerings sprang up in many industries such as the public sector; mainly looking for deals in homeland security and government contracting markets, consumer goods, energy and construction, financial services, sports, and entertainment. They are becoming popular in many emerging economies such as China and India.SPACs are used in many companies that wish to go public. They are also used in areas where financing is difficult. Many SPACs go public with a particular industry in mind, while others do not have such preset criteria. SPACs compete with private equity groups and strategic buyers for acquisition candidates. This competition can result in companies getting good valuations.The process is like this; the management team, which is…