SPAC IPO Issuance Exceeds Traditional IPOs for the First Time
NEW YORK – October 13, 2020 – ICR, a leading strategic communications and advisory firm, today released its Q3 2020 SPAC Market Update.
SPAC IPO issuance exploded in the third quarter of 2020, with 80 SPACs raising $32 billion, four times the $8 billion raised in Q2 2020. This strong Q3 SPAC IPO activity even eclipsed traditional IPO issuance, resulting in 183 active public SPACs holding more than $57 billion in cash as of September 30, 2020.
“SPACs have transformed the go-public process and companies now have multiple choices including a traditional IPO, a Direct Listing or a SPAC. The market’s insatiable appetite for SPAC IPOs is really being driven by the potential alpha an investor receives in a low interest rate environment on what’s essentially a risk-free purchase at the time of the offering due to the ability to redeem shares and take your money back if you don’t like the eventual merger,” said Don Duffy, President of ICR. “Interest in SPAC transactions as a path to the public markets is being driven by improved deal structures, high quality sponsors, broadening institutional investor participation, and more sophisticated sellers that understand the benefits of the SPAC structure. SPAC sponsors are finding great merger partners in today’s market and quality institutional investors are committing to the PIPEs making many of these deals successful.”
The fourth quarter is already seeing a high level of SPAC issuance activity, with 22 SPAC IPOs so far in October:
|10/9/2020||Social Capital Hedosophia Holdings Corp. VI||IPOF.U||$1,000,000,000|
|10/9/2020||Social Capital Hedosophia Holdings Corp. V||IPOE.U||$700,000,000|
|10/9/2020||Social Capital Hedosophia Holdings Corp. IV||IPOD.U||$400,000,000|
|10/9/2020||Landcadia Holdings III, Inc.||LCYAU||$500,000,000|
|10/8/2020||Petra Acquisition, Inc.||PAICU||$70,700,000|
|10/7/2020||Montes Archimedes Acquisition Corp.||MAACU||$400,000,000|
|10/7/2020||NextGen Acquisition Corporation||NGACU||$350,000,000|
|10/7/2020||TPG Pace Beneficial Finance Corp.||TPGY.U||$350,000,000|
|10/7/2020||TPG Pace Tech Opportunities Corp.||PACE.U||$450,000,000|
|10/6/2020||FirstMark Horizon Acquisition Corp.||FMAC.U||$360,000,000|
|10/2/2020||Avanti Acquisition Corp.||AVAN.U||$600,000,000|
|10/2/2020||Sports Entertainment Acquisition Corp.||SEAH.U||$400,000,000|
|10/2/2020||Apollo Strategic Growth Capital||APSG.U||$750,000,000|
|10/2/2020||ION Acquisition Corp 1 Ltd.||IACA.U||$258,750,000|
|10/2/2020||VG Acquisition Corp.||VGAC.U||$480,000,000|
|10/2/2020||Vy Global Growth||VYGG.U||$575,000,000|
|10/2/2020||Atlantic Avenue Acquisition Corp||ASAQ.U||$250,000,000|
|10/1/2020||IG Acquisition Corp.||IGACU||$300,000,000|
|10/1/2020||AEA-Bridges Impact Corp.||IMPX.U||$400,000,000|
|10/1/2020||Altimeter Growth Corp.||AGCUU||$500,000,000|
|10/1/2020||Recharge Acquisition Corp.||RCHGU||$202,000,000|
“The increase of SPACs in the market is driving a critical need for experienced and integrated investor relations and public relations teams that understand the industry to create awareness of the transaction announcement, clearly articulate the combined company’s long term shareholder value creation strategy, manage through the de-SPAC process, and prepare management to succeed as a reporting public company,” said Phil Denning, Partner at ICR. “In addition, the importance of an experienced governance team should not be overlooked, as the proxy advisory firms have begun weighing in more frequently on SPAC mergers as the deal size and institutional participation grows. They may not be able to hold up the deal, but you don’t want to leave a newly public management team on bad terms with ISS.”
Companies going public via a SPAC merger are increasingly active with follow-on offerings. An analysis of SPAC mergers completed thus far in 2020 revealed that an equity rollover strategy is more favorable than secondary selling.
“Typically, the equity rollover is between 75%-85% of the target’s initial value. Following the closing of a merger, we are actively helping these newly-public companies manage the complexities of the capital markets and plan for liquidity events for the rollover equity holders,” said Lee Stettner and Steve Parish, Co-Heads of Capital Markets at ICR Capital.
ICR is the largest advisor and communications consultant to SPACs, having completed dozens of transactions over the past decade. To obtain a copy of ICR’s Q3 2020 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, San Diego and Beijing. Learn more at www.icrinc.com. Follow us on Twitter at @ICRPR.
Brian Ruby, ICR, 203-682-8268, email@example.com