Illustration: Aïda Amer/Axios

Churchill Capital Corp. III has agreed to acquire health-cost management services provider MultiPlan at an initial enterprise value of $11 billion, as such deals continue to proliferate as alternatives to IPOs.

Why it matters: This is the largest special purpose acquisition company (SPAC) merger, and it also includes the largest private investment in public equity (PIPE) associated with a SPAC. Existing MultiPlan owners like Hellman & Friedman and General Atlantic will roll over more than 75% of their collective stake and own over 60% of the public company.

  • A source tells Axios that negotiations began before the pandemic.

Context: A SPAC is a shell company that raises money from the public markets for the purpose of acquiring a private company.

This too: Spartan Energy Acquisition Corp., a SPAC backed by Apollo Global Management, agreed to buy electric car maker Fisker at a $2.9 billion enterprise value.

Oh, and this: Two more SPACs on Friday filed to go public.

Why now? SPACs have been around for years, but what we're seeing now seems largely driven by public equity froth.

  • Stock markets are salivating for almost any new issue, whether or not it includes an operating company. That's the perfect petri dish for SPACs, and they're raising billions.
  • IPOs are also going gangbusters but often take longer to complete with far more disclosure than do reverse mergers via SPAC. Plus there's rampant underpricing. So why not strike while the iron is hot and (relatively) easy?

Going public via SPAC does have some downsides. For example, you still need shareholder approval, could get hammered by redemptions, and need to give a large slice of economics to the SPAC sponsor.

The bottom line: SPACs, not direct listings, are the 2020 challenge to IPOs and IPO bankers.

Go deeper

Felix Salmon, author of Capital
Oct 1, 2020 - Economy & Business

How equity became more attractive than debt

Illustration: Annelise Capossela/Axios

The prime example of something highly improbable that became conventional wisdom: The idea that both interest rates and inflation will remain near zero for well over a decade.

Why it matters: As Axios' Dan Primack writes, private equity firms (the polite rebranding of "leveraged buyouts") have historically bought companies and loaded them up with debt.

Opposition leader Leopoldo López flees Venezuela

Venezuelan opposition politician Leopoldo López outside the Spanish embassy in Caracas, in 2019. Photo: Juan Barreto/AFP via Getty Images

Leopoldo López, a former political prisoner and prominent Venezuelan opposition leader, has left the country, his Popular Will party confirmed in a statement Saturday.

Why it matters: He's been an influential force in the push to oust President Nicolás Maduro's regime and a mentor to opposition leader Juan Guaidó. He'd been in the Spanish ambassador's Caracas residence since escaping house arrest in April 2019 following a failed military uprising.

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