The new company is designed in such a way that it can merge with another corporation that wishes to go public.
Named as Fifth Wall Acquisition III, it is the third special purpose acquisition company which is also called SPAC or Blank Check Company. In January, the first was announced and it got public in February. The second SPAC was announced by Fifth Wall in March.
Some new documents suggest Fifth Wall filed with the U.S. Securities and Exchange Commission. 25 million shares will be bought by this newest SPAC and the company will sell each piece at $10 each. Raising $250 million is the goal.
Real Deal was the first one to report the news of the new SPAC. Inman’s request for comment was not immediately responded by Fifth Wall.
SPACs have recently gained a lot of popularity in spite of comparatively being a new concept. Making it easier for the companies to go public is their idea. The SPAC will itself start selling shares on the stock market although it has no traditional business operations of its own. Rather, a company that already exists merges with the SPAC, this lets the SPAC start selling shares. Meanwhile, it is least interested in doing the tedious process of holding any traditional initial public offering (IPO).
Considering the case of the real estate world, a famous situation is when a SPAC was used by iBuyer Opendoor to go public in December. A SPAC is also owned by Spencer Rascoff, former CEO of Zillow. This SPAC is in the process of taking over Offerpad which is an iBuying competitor of Opendoor, public. Moreover, a SPAC has also been formed by a Japanese mega fund Softbank. It has invested in several real estate companies. Some of them are WeWork, Opendoor and Compass.
Taking the case of the latest SPAC by Fifth Wall, it is particularly noted in SEC documents that they have not, nor anybody else on their behalf, engaged in any major discussion, directly or indirectly, with any of the business combination targets. The simpler way of saying this is that company is yet not itself about which company it might merge with in future.
It may even sound risky but a SPAC is only valuable only in the case if it is able to strike a valuable acquisition deal. Another common scenario is that hundreds of deals were reviewed by his SPAC before finally deciding its merger with Offerpad.
It was stated by the SEC document that the company wishes to focus on those companies which are situated outside of the United States. Another important thing stated in the document reveals that after the completion of the merger of the company with another company, a majority of their directors and officers will stay outside of the United States.
The co-founder of the Fifth Wall, Brendan Wallace will serve as the CEO and President of new SPAC.