Fortress Value Acquisition Corp. V (FVAC V) IPO: An Investor's Guide

This guide offers retail investors a clear, detailed overview of Fortress Value Acquisition Corp. V's (FVAC V) initial public offering (IPO). FVAC V is a Special Purpose Acquisition Company (SPAC) sponsored by Fortress Investment Group, a prominent global investment manager, and this summary provides critical information for informed decision-making.

1. Business Description (What the Company Does)

Fortress Value Acquisition Corp. V operates as a "blank check" company. This means it has no existing operations, products, or services. Its sole purpose is to raise capital through this IPO. FVAC V will then use these funds to acquire and merge with an existing private operating company, allowing that private company to become publicly traded without undergoing a traditional IPO. FVAC V is incorporated in the Cayman Islands.

Sponsor Background: FVAC V marks the fifth SPAC launched by affiliates of Fortress Investment Group LLC. Fortress is a well-established investment firm with a history of managing significant capital across diverse asset classes, including private equity, credit, and real estate. Its prior SPACs—FVAC I, FVAC II, FVAC III, and FVAC IV—have pursued acquisitions in various sectors. While past performance does not guarantee future results, Fortress's experience in identifying and executing complex transactions offers investors a key consideration.

2. Investment Strategy and Target Acquisition Focus

FVAC V aims to acquire a target company with an enterprise value typically ranging from $1 billion to $5 billion. While the S-1 filing does not specify a particular industry, the sponsor's previous SPACs have targeted companies across technology, industrials, and business services. The management team will leverage its extensive network and investment expertise to identify a company that demonstrates:

• Strong management teams and competitive advantages.
• Significant growth potential and attractive financial profiles.
• Opportunities for operational improvements and value creation post-merger.
• A clear path to becoming a successful public company.

The sponsor must complete a business combination within 24 months of this offering's closing, with a possible extension to 27 months under certain conditions.

3. Use of Proceeds (What They'll Do with IPO Money)

FVAC V will place the vast majority of the IPO proceeds, estimated at approximately $250 million (or $287.5 million if the underwriters fully exercise their over-allotment option), into a U.S.-based trust account. The company will invest these funds in U.S. government securities or money market funds.

The trust account funds primarily finance the acquisition of a target company and provide working capital for the combined entity. FVAC V will allocate a smaller portion of the proceeds, typically up to $1 million to $2 million, outside the trust. These funds will cover general corporate purposes, including operating expenses, due diligence costs, and legal and accounting fees associated with identifying and evaluating potential acquisition targets.

4. Financial Highlights (Revenue, Profit/Loss, Growth)

As a newly formed SPAC, FVAC V has no operating history, revenue, or profit/loss from operations. Its initial financial statements will primarily reflect:

• Cash held in the trust account, representing the substantial majority of the IPO proceeds.
• A smaller amount of cash held outside the trust account for operating expenses.
• Liabilities, including accrued expenses and potential loans from the sponsor. Fortress Value Acquisition Sponsor V LLC will receive $20,000 per month for office space and administrative services. Additionally, the SPAC will repay up to $300,000 in loans from the sponsor for initial setup costs. The sponsor may also provide further loans up to $1.5 million to cover deal-related expenses, which could convert into additional shares for the sponsor.
• Expenses related to the company's formation, the IPO, and the search for a target business.

5. Management Team (Key Executives)

A SPAC's success heavily relies on its management team's experience and judgment. The executive leadership includes:

• Andrew Stroud: Co-Chief Executive Officer. Mr. Stroud brings extensive experience in private equity and corporate finance, having held leadership roles at Fortress and other investment firms. He focuses on identifying and executing strategic investments.
• Micah B. Kaplan: Co-Chief Executive Officer. Mr. Kaplan also offers significant expertise in investment management and mergers & acquisitions from his tenure at Fortress and prior roles, contributing to the firm's track record in complex transactions.

The sponsor, Fortress Value Acquisition Sponsor V LLC, is an affiliate of Fortress Investment Group. While previous Fortress SPACs featured other prominent individuals like Michael Novogratz, Andrew A. McKnight, and Joshua A. Pack in executive roles, the current S-1 filing designates Mr. Stroud and Mr. Kaplan as FVAC V's Co-CEOs. The broader Fortress team, including its senior leadership and investment professionals, will support the SPAC's efforts.

6. Competitive Landscape (Main Competitors)

In its search for a target business, FVAC V will compete with a broad range of entities that also seek to acquire private companies. These competitors include:

• Other Special Purpose Acquisition Companies (SPACs): Many other SPACs have recently completed or are completing their IPOs, or actively seek business combinations. Many of these SPACs may share similar investment criteria and target industries.
• Private Equity Funds: Traditional private equity funds, venture capital funds, and other investment funds constantly seek to acquire private companies.
• Strategic Acquirers: Operating companies, both public and private, often acquire other businesses to expand operations, gain market share, or obtain new technologies.
• Investment Banks and Financial Institutions: These entities advise potential target companies on various strategic alternatives, including traditional IPOs, direct listings, or sales to other entities.

FVAC V's ability to identify and successfully complete a business combination will depend on its management team's expertise, network, and capacity to offer a compelling value proposition to potential target companies within this competitive environment.

7. Offering Details (Shares, Price Range, Ticker Symbol)

• Shares Offered: FVAC V offers 25,000,000 Class A Ordinary Shares.
• Price: Each Class A Ordinary Share is priced at $10.00.
• Underwriter Option: Underwriters hold a 30-day option to purchase up to an additional 3,750,000 Class A Ordinary Shares to cover over-allotments.
• Exchange & Ticker: FVACV Class A Ordinary Shares will trade on the New York Stock Exchange (NYSE) under the ticker symbol FVACV.
• No Units or Warrants for Public Investors: A significant differentiator for this offering is that public investors will NOT receive warrants or rights as part of their IPO investment. This means investors purchase only Class A Ordinary Shares, unlike many other SPAC IPOs that include warrants, which offer additional upside potential.

8. Risk Factors (Key Risks Investors Should Know)

Investing in FVAC V carries unique risks inherent to the SPAC structure:

• "Blank Check" Risk: Investors entrust the management team to identify and acquire a suitable target company within the specified timeframe. There is no guarantee they will find a high-quality business, or any business at all.
• Deadline Pressure: The 24-month deadline (with potential extension) could pressure the management team to complete a less-than-optimal acquisition to avoid liquidation, which would result in the sponsor losing their investment.
• Dilution from Founder Shares (Sponsor Promote): The sponsor purchased approximately 20% of the company's shares (founder shares) for a nominal price, typically around $0.003 per share, compared to the public IPO price of $10.00. This "promote" means that even if the combined company performs modestly, the sponsor can realize substantial gains, while public shareholders may experience significant dilution and potentially lower returns.
• No Warrants for Public Investors: Unlike many SPACs, this offering does not include warrants for public investors. This removes a common source of additional upside leverage for investors and may make the offering less attractive compared to SPACs that do include warrants.
• Redemption Risk: Public shareholders have the right to redeem their shares for a pro-rata portion of the trust account (approximately $10.00 per share) if they vote against a proposed business combination or if the SPAC fails to complete a merger within the deadline. While this offers downside protection, high redemption rates can reduce the cash available for the acquisition, potentially jeopardizing the deal or forcing the SPAC to seek alternative financing.
• Conflicts of Interest: FVAC V's officers and directors may have other business interests and responsibilities, including involvement with other Fortress entities or prior SPACs. This could lead to conflicts regarding time allocation or the selection of a target company, especially if a potential target has affiliations with Fortress or its other funds. The sponsor also has a strong financial incentive to complete any business combination to realize the value of their founder shares.
• Liquidation Risk: If FVAC V fails to complete a business combination within the prescribed timeframe, it will liquidate and return the funds in the trust account to public shareholders. While this generally returns the initial investment (minus operating expenses), investors will lose the opportunity cost and any potential gains.
• Market Volatility: The SPAC market can be highly sensitive to broader market conditions and investor sentiment, which could impact FVAC V's ability to find a suitable target or the performance of its shares post-merger.

Conclusion:

Investing in FVAC V means investing in the management team's ability to identify and execute a successful business combination. While the sponsor, Fortress Investment Group, brings a strong track record and extensive resources, investors must carefully weigh the unique risks associated with SPACs. These include the significant dilution from founder shares and the absence of warrants for public investors in this specific offering. Prospective investors should review the full S-1 filing and consult with a financial advisor to determine if this investment aligns with their financial goals and risk tolerance.