Bank of Montreal’s investment bank is building up its capabilities to help clients establish blank-check companies as the Canadian firm seeks to play a bigger role in the fast-growing trend. Bloomberg reports.
BMO Capital Markets is building a “fairly big business” around special purpose acquisition companies, entities that raise money to buy businesses, according to the division’s top executive, Dan Barclay. SPACs have gathered momentum in recent years because public markets have been offering comparable valuations and cost of capital as in the private market, he said.
The surge in SPACs, which have raised more than $145 billion on U.S. exchanges in the past 12 months, has set off a global search for suitable targets — usually startups with little revenue or mature companies sitting in private equity portfolios, though some are now looking at divisions of public companies. Read more.
