SPAC Seeks Independent Valuation of Target
SPAC Seeks Independent Valuation of Target
A special purpose acquisition company (SPAC) was contemplating entering into a Business Combination Agreement with a private therapeutics company focusing on inflammatory disorders. The SPAC retained RNA to render an opinion as to whether the merger consideration to be issued by the SPAC in the transaction would be fair, from a financial point of view, to the SPAC.
Performed extensive due diligence, including conducting multiple interviews with the target company’s management team, reviewing equity analyst and market research reports and analyzing epidemiology publications.
Valued the target company using the income approach to assess the risk adjusted net present value (NPV) for its lead asset and product pipeline.
Valued the target company using the market approach by considering private company financing transactions to assess the value of the product pipeline and the company as a whole.
RNA presented its findings to the SPAC’s Board of Directors and rendered a written opinion which concluded that the merger consideration to be issued by the SPAC was fair, from a financial point of view, to the SPAC.
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