A special first

Favourable investment conditions have brought to market Italy’s first-ever SPAC.

A number of European investors have introduced to Italy what was once an almost uniquely American investment product. With the creation of Italy1, the founders of European alternatives firm BLM Partners have created Italy’s first-ever special purpose acquisition company (or SPAC).

SPACs are publicly-traded vehicles, which raise a certain amount of capital via an IPO and then acquire a private business, effectively taking it public. Unlike blind pool private equity funds, SPACs call for a shareholder vote on a potential acquisition and only make one acquisition per vehicle.

Italy1, which will be listed on the Italian stock exchange, will seek up to €150 million through the offering. Once the funds are raised, the shell company will take a stake in one Italy-focused business worth somewhere between €300 million and €1 billion in equity value.

On its website Italy1’s board argued the current economic climate in Italy is ripe for buyers, as the markets have yet to undergo a full recovery. “Assuming that the bottom of the economic crisis has been reached in Italy and access to capital remains constrained, Italy1 expects the number of potential sellers to increase,” said the board