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SPAC Talk

As IBC deal cancellations continue to accelerate.... June brought 12 deal termination announcements, which happens to be the largest number of deal cancellations to occur in any one month ever. Among the deal casualties in June is SPAC TKB Critical Technologies 1’s (USCT) proposed merger with already de-SPACed once WEJO. This particular deal cancellation was always in the cards after the UK-based vehicle data provider filed for bankruptcy at the end of May. A proposed SPAC merger with another already once de-SPACed company, commercial EV manufacturer, was terminated on July 3. The cash-starved de-SPAC had announced its proposed merger with Kensington Capital Acquisition Corp V (KCGI) only two months ago. The termination of the ARVL merger transaction serves to highlight the current travails of EV start-ups. … New deal announcements keep on coming. On the other side of the equation, June saw 16 proposed IBCs announced. So, there are still more new deals being announced than terminations. We are seeing a pick-up in the average deal size. The 16 proposed IBCs are worth an average of ~$450 million versus $312 million in May, if we exclude the monster $27 billion BSAQ/VinFast IBC deal announced last month. Seven of the 16 transactions in June were valued at more than $500 million, the largest being a proposed $1.2 billion merger involving SPAC Semper Paratus Acquisition (LGST) and advanced clinical-stage specialty immunotherapy biotech Tevogen Bio. By comparison, four of May’s 16 deal announcements including that whopper deal were worth more than $500 million. SPACs and the EV blow-up. Talking about troubled EV start-ups, the sector reported another bankruptcy when Lordstown Motors filed for Chapter 11 on June 27. In the face of depleting cash reserves, others could follow. As poorly as de-SPACs in general have performed for investors, those betting specifically in the EV space within the de-SPAC category have performed even worse Our SPAC Talk Focus this week considers the topic further.