SPAC Target Selection: Sectors, Suitability, and Pitfalls
In this episode of The SPAC Podcast, Patrick Sturgeon, Managing Partner at Brookline Capital Markets, discusses what types of companies are best suited for going public through a SPAC merger. He explains why fundamentally strong businesses with good products, growth potential, and solid operating margins make attractive public companies.
Patrick also highlights why certain asset-heavy sectors — such as banks, insurance companies, real estate, or asset-based businesses — may not be as well-suited to SPAC structures, where dilution from the sponsor promote could reduce value. His insights help clarify which companies align better with the SPAC model.
Connect with the Guest:
Patrick Sturgeon – Managing Partner, Brookline Capital Markets
Website: https://brooklinecapmkts.com/
LinkedIn: https://www.linkedin.com/in/patrickasturgeon/
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https://www.thespacpodcast.com/guests/patrick-a-sturgeon/
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Michael Blankenship LinkedIn: https://www.linkedin.com/in/mikeblankenship/
Joshua Wilson LinkedIn: https://www.linkedin.com/in/joshuabrucewilson/
YouTube Channel: https://www.youtube.com/@Thespacpodcast
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Disclaimer: Michael J. Blankenship is a licensed attorney and partner at Winston Taylor. Joshua Wilson is a licensed Florida real estate broker and holds FINRA Series 79 and Series 63 licensure. The content of this podcast is for informational and educational purposes only and should not be considered legal, financial, or compliance advice. All views and opinions expressed by the hosts and guests are their own and do not necessarily reflect the policies or positions of any regulatory agency, law firm, organization, or employer. Listeners should consult their own legal counsel, compliance teams, or financial advisors to ensure adherence to applicable regulations, including SEC, FINRA, and other industry-specific requirements. This podcast does not constitute a solicitation or recommendation for any financial products or services.
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Michael: Are there certain types of companies that are particularly well suited to go public via SPAC? Any sectors, stages, or situations where the structure is more appealing?
Patrick Sturgeon: We get this question a lot, including directly from company boards and management teams: should we be public, and if so, should we consider a SPAC? A good company with strong fundamentals — good product, solid growth, and strong operating margins — makes a strong public candidate.
If we look at sectors less suited for SPACs, I’d flip the question. Certain businesses where value is derived primarily from book value or that are asset-heavy don’t always fit well. Examples include depository banks, insurance firms, real estate, or other asset-based businesses. In those cases, the dilution from the sponsor promote could make the economics less attractive compared to a traditional IPO or direct listing.