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How does PIPE work in SPAC?

Personal Finance & Money Asked on July 14, 2021

My basic understanding of it is that PIPE is a group of rich investors/institutions investing in a public company through private arrangement but how does this apply to SPAC when it’s not public yet? Is the PIPE investing in the SPAC itself or the target company?

Update:

PIPE investors to commit $200M concurrent with transaction announcement (from page 4 of the PDF)

One Answer

The PIPE investors are likely investing in the SPAC, which is the public company intending to acquire the private target company. As for timing, the PIPE investment might be announced simultaneously with the acquisition announcement. The PIPE investment may or may not be contingent on a successful acquisition.

Correct answer by Orange Coast- reinstate Monica on July 14, 2021

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