As the traditional IPO market for companies has stalled, SPACs are coming to market to potentially source deals from a large and growing IPO backlog. The SPAC market had its best quarter since 2022, with a mix of new and serial sponsors pricing deals and numerous additional filers expected.
As reported in our October SPAC Market Update & Outlook, in the third quarter of 2024, the SPAC IPO market saw the pricing of 18 IPOs, raising a total of $3.3 billion—the highest quarterly proceeds in the last two years. Approximately 50% of the new SPAC IPOs this quarter were serial SPAC issuers raising $1.5 billion. This surge in proceeds is attributed to both an increase in the number of IPOs and a rise in the average deal size, which reached $186 million this quarter, marking the highest level since the SPAC boom in 2021.
“As the traditional IPO market for companies has stalled, we are seeing new SPACs come to market to potentially source deals from a large and growing IPO backlog,” said Don Duffy, President of ICR. “Serial sponsors’ IPO activity suggests they expect deal flow to be robust as more private companies will likely consider alternative routes to an IPO if they cannot get into the queue for 2025.”
“First-time issuer activity is a bellwether for SPAC market confidence and deal-making. In the third quarter, new issuers raised more SPAC IPO proceeds than serial sponsors, which last happened in Q1 2023,” said Niren Nazareth, Managing Director at ICR Capital. “While serial sponsors backed half of the SPAC IPOs in Q3 by number, new SPAC sponsor platforms raised more IPO proceeds. This is an early signal and meaningful change in market sentiment. If this trend continues, SPAC capital formation will benefit from increased attention, resources and financing.”
ICR is the largest communications consultant and advisor to SPACs, having worked on over 170 transactions since 2021. Download a copy of ICR’s October SPAC Market Update & Outlook report today.
