A special purpose acquisition company (SPAC) is a publicly traded shell company that raises money in an IPO in order to acquire a private business. Through this process, the private company effectively becomes public without having to go through a formal IPO process. SPACs have become popular in recent years because they are a quicker route for companies to go public, and this growing investor demand has led to a boom in the number of SPACs in the market.
One of those SPACs, Healthcare Merger Corp. (NASDAQ: HCCO), recently announced the acquisition of SOC Telemed, one of the largest providers of acute-care telemedicine. Should investors buy into this soon-to-be-public company?
SOC Telemed provides medical diagnosis and treatment via telecommunications technology. The company has built a software platform that connects a network of physicians and consultants to respond to patients who need immediate treatment options.