ICR’s July SPAC Market Update & Outlook report shows that private companies continue to have an alternative path to traditional IPOs as serial sponsors continue to price new SPAC IPOs. The purchase of existing sponsor economics by serial sponsors also shows confidence from veteran SPAC teams in sourcing public-ready targets and closing deals.
The SPAC IPO market raised $1.8 billion through 10 IPOs during the second quarter of 2024, more proceeds than any quarter over the last two years. Serial sponsors were the principal force in the market pricing 8 of the 10 SPAC IPOs. These serial sponsors elected to raise larger trusts; the average Q2 SPAC IPO increased to $181 million, a 59% jump from last quarter.
“Veteran sponsors have stabilized blank check issuance, raising over 2x the proceeds compared to first-time sponsors,” said Don Duffy, President of ICR. “Serial sponsors have made a commitment to the SPAC market through investments in deal expertise, network and infrastructure. While the front-end of the SPAC market has normalized, a resurgence of deal flow into the structure will likely require an improvement in institutional interest and post-close trading.”
Serial sponsors have attracted larger and higher-quality targets, which are more compelling to institutional investors. In 2024 these investors have also re-opened the SPAC PIPE market for select deals, with ~10% of completed SPAC transactions raising almost $2 billion of equity capital.
“Repeat sponsor activity is a bellwether for the SPAC market. Seasoned teams are attracting stronger targets and investors, therefore bringing more attractive SPAC deals to public investors,” said Niren Nazareth, Managing Director at ICR Capital. “As other SPAC market dynamics improve, like PIPE capital availability, we believe more companies will increasingly see the SPAC market as a compelling alternative to other go-public routes.”
ICR is the largest communications consultant and advisor to SPACs, having worked on over 170 transactions since 2021. Download ICR’s July SPAC Market Update & Outlook today.
