Disadvantages of SPACs:

Despite their advantages, SPACs also present certain disadvantages and risks. One
significant concern is the post-merger performance of the combined entity. If the target
company fails to meet expectations or encounters operational difficulties post-
acquisition, it can lead to negative consequences for investors and SPAC sponsors alike.
This risk underscores the importance of thorough due diligence and strategic alignment
between SPAC sponsors and target companies.

Moreover, SPACs face regulatory scrutiny, albeit to a lesser extent than traditional IPOs.
Regulatory agencies closely monitor SPAC transactions to ensure compliance with
disclosure requirements and to address potential conflicts of interest between SPAC
sponsors, investors, and target companies. Navigating these regulatory considerations
requires careful attention to transparency and governance practices throughout the SPAC
process.

Additionally, investors in SPACs may have limited protections compared to investors in

traditional IPOs. The lack of transparency regarding the target company's financials and
operational performance prior to the merger can pose challenges for investors in
evaluating the investment opportunity and assessing potential risks. As such, investors
should exercise caution and conduct thorough due diligence before participating in SPAC
transactions.

These considerations highlight the nuanced landscape of SPACs and underscore the
importance of comprehensive analysis and risk assessment for companies, investors, and
other stakeholders involved in SPAC transactions.

Conclusion:
In conclusion, drawing from insights provided in both the Deloitte document and the CNBC
video, it's evident that SPACs are gaining momentum in Europe. Companies opt for SPACs over
IPOs due to their streamlined process, reduced regulatory scrutiny, and faster time to market.
SPAC mergers offer greater certainty in valuation and fundraising terms, providing private
companies with access to capital markets without the volatility often seen in IPOs. Additionally,
partnering with experienced sponsors can offer valuable expertise and resources for growth.
Ultimately, SPACs provide a more efficient and flexible route to public markets for companies
seeking capital.