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SPAC Talk

Excess supply of SPACs continues to dwindle. SPAC IPOs continue to be few and far between, with the sole pricing thus far in June being media & entertainment-focused ESH Acquisition Corp. (ESHA) priced on June 14, with the SPAC raising $115 million including take-up of the underwriter’s greenshoe option. This brings the total to 16 IPOs as we approach the end of the first half of 2023. However, against that one IPO, 19 SPACs have completed or have scheduled liquidations this month, bringing the total for the year to 125. The SPAC IPO pipeline stands at 46. The total number of live SPACs in the market is 389, comprising 219 seeking targets and 170 with announced deals. IBC deal cancelations accelerate. As we enter the last week of June, we continue to see a steady flow of new IBC deals being announced. Eleven have been announced thus far in June, with the average deal size hovering around $500 million. But we have also seen a pickup in deal cancelations. Seven deals have been terminated in June to date, already the largest monthly total this year. As of writing, a total of 31 deals valued at an aggregate of $15.6 billion have been terminated this year. For the whole of 2022, a total of 61 deals valued at ~$86 billion failed to proceed. The state of the market. As we approach the end of the first half of the year, while headwinds are still present, things seem to be perking up at both ends of SPAC land. The SPAC IPO market continues on a slow drip but will be no worse than the back half of 2022 and, in some respects, better, with an upsizing in the size of new SPACs. Even de-SPAC investors are getting some relief although the question remains as to whether de-SPACs have actually hit the trough of the disillusionment phase of the hype cycle or are just simply enjoying a temporary rally. We discuss this further in our SPAC Talk Focus section.