SPAC Talk
SPAC IPOs continue on snooze control. Last year saw just 31 SPAC IPOs priced, raising an aggregate of $3.8 billion in gross proceeds, down from 86 and $13.4 billion in 2022. This makes 2023 the quietest year for SPAC IPOs since 2016, when 13 IPOs raised $3.5 billion. As we start the third week of 2024, the SPAC market remains dormant, with no new pricings to report yet. With live S-1 registration statements at 35, there seems to be no reason to expect a major rebound in SPAC IPO activity anytime soon. IBC value depression continues. The last two weeks of 2023 did see a rush of new deal announcements, bringing the total for the year to 159, but well below the 196 in 2022. This contraction was accompanied by value depression, with the average deal size dropping 16% from $694 million in 2022 to $583 million in 2023. Last year did include several outliers with deal values of more than $1 billion, and no more so than SPAC BMAQ’s IBC with Vietnamese carmaker VinFast (NASDAQ: VFS) pitched at a $27 billion TEV. Excluding that deal, the average deal size for 2023 dropped to $413 million. The new year opened with four new deals on the table with an average value of $184 million. As of writing, there are 123 SPACs searching for targets and 142 SPACs that have entered merger agreements yet to close. No love for de-SPACs. Ninety-eight de-SPACings were completed in 2023, falling just short of the 102 de-SPACings consummated in 2022. SPACs continue to suffer virtually full trust fund depletion ahead of de-SPACings. With their small floats, de-SPACs remain an out-of-favor asset category. The Bloomberg De-SPAC Index (DESPACTR) was down 15% in 2023, following a 73% plunge in 2022, and has given up another 10% thus far in 2024. More SPAC exits in the cards. Last year saw a record 202 SPACs liquidated, returning ~$59 billion to their public shareholders, well past the unprecedented 146 liquidations returning $48 billion in 2022. Given the shrinkage of the SPAC universe, we will not see liquidations anywhere near those numbers this year, but probably still a lot more than was the norm prior to 2022 and possibly as many as 60. Our SPAC Talk Focus explains how we arrive at that number.
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