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M&A monitor

SPACs: the M&A craze that shows no sign of slowing

You don’t have to go back far to find a time when SPACs had a credibility problem. Even a couple of years ago there was a perception that they were somehow less reliable than other types of buyers, and in an auction process might not show up at closing. 

Fast-forward to today and SPACs are showing up at a lot of closings. Last year, US SPACs were involved in de-SPAC deals (where the listed shell acquires, or merges with, an existing business) worth a combined $156bn, more than 4 per cent of global M&A by value. Through the first quarter of 2021, this number had risen to more than 17 percent.

Bubble or not, there are currently more than 400 US SPACs looking for targets (representing hundreds of billions of dollars of firepower, taking into account expected PIPE financing), and since most have two years to consummate a deal, they’re not going away any time soon.

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There are currently more than 400 US SPACs looking for targets, representing hundreds of billions of dollars of firepower

For more insights on SPACs, click here.