Record-Breaking Q1 SPAC IPO Issuance Exceeds FY 2020
NEW YORK – April 7, 2021 – ICR, a leading strategic communications and advisory firm, today released its Q1 2021 SPAC Market Update report.
SPAC IPO issuance broke all records in the first quarter of 2021, with 298 SPACs raising nearly $88 billion. The tally was more than double the 132 SPACs and $39 billion raised in the fourth quarter of 2020 and more than the 248 SPAC IPOs that raised over $83 billion in all of 2020.
“This unprecedented first quarter SPAC IPO activity has resulted in 430 active public SPACs holding more than $140 billion in cash seeking merger partners as of March 31, 2021,” said Lee Stettner, Co-Head of Capital Markets at ICR Capital. “The SPAC IPO momentum is pushing into Q2 2021 with 250 additional SPACs publicly filed with the SEC and it’s likely the tremendous pace of new SPAC issuance will moderate as we enter Q2.”
”There are also an overwhelming number of SPAC PIPE deals in the market causing institutional investors to be much more selective as they can’t process and ultimately evaluate them in a timely manner,” said Don Duffy, President of ICR. “Companies and their owners are also asking tougher questions of SPAC sponsors. It’s not just about the valuation, but also their ability to secure the PIPE financing, build the best team of co-advisors, and their willingness to focus on one SPAC deal at a time to drive an optimal outcome.”
ICR has advised on more than 80 SPAC transactions since 2020.
“ICR helps its SPAC clients by preparing for and executing on critically-important and fully-integrated investor, analyst, and media marketing, communications, and awareness campaigns,” added Duffy. “We’re uniquely positioned to assemble a team of industry-focused investor relations, public relations, and corporate governance experts to advise both the SPAC sponsor and the target company leading up to the deal announcement, during the de-SPAC process, and after the deal closing to ensure a smooth transition to life as a publicly listed entity.”
SPAC sponsors should also be prepared for critical pre-closing shareholder vote activity and important post-closing disclosure and reporting policies.
“SPAC sponsors should not take shareholder voting for granted, as there have been a number of transactions where getting the retail holders to vote in a timely manner was challenging, risking the ability to get a quorum at the special meeting,” said Phil Denning, Partner at ICR. “As the shareholder vote approaches it is important to develop a tailored engagement program based on the mix of institutional and retail holders. Companies with a significant base of retail holders will need to be more creative in shareholder engagement in order to get out the vote.”
“Post-closing, we have seen a sharp increase in short attacks, that in many cases are being driven by poor disclosure practices and a lack of public company readiness,” added Denning. “We’re seeing an increasing number of companies miss projections soon after the merger closing, further demonstrating the need for increased conservatism, as these companies go public at an earlier growth stage with a real need for expert advice.”
“We are advising management teams and existing shareholders who have completed SPAC mergers on the complexities of the public capital markets, including raising additional equity capital, liquidity for rollover shareholders through secondary offerings, and strategies for warrant mitigation,” said Steve Parish, Co-Head of Capital Markets at ICR Capital.
ICR is the largest advisor and communications consultant to SPACs, having worked on more than 120 transactions over the past decade and half of all SPACs announced in 2021. To obtain a copy of ICR’s Q1 2021 SPAC Market Update report, please click here.
Established in 1998, ICR partners with its clients to execute strategic communications and advisory programs that achieve business goals, build awareness and credibility, and enhance long-term enterprise value. The firm’s highly-differentiated service model, which pairs capital markets veterans with senior communications professionals, brings deep sector knowledge and relationships to more than 750 clients in approximately 20 industries. ICR’s healthcare practice operates under the Westwicke brand (www.westwicke.com). Today, ICR is one of the largest and most experienced independent communications and advisory firms in North America, maintaining offices in New York, Norwalk, Boston, Baltimore, San Francisco and Beijing. Learn more at www.icrinc.com. Follow us on Twitter at @ICRPR.
Brian Ruby, ICR, 203-682-8268, firstname.lastname@example.org