SPAC Talk
Liquidations continue to mount. At the risk of sounding monotonous, while the SPAC IPO market remains pretty much comatose, there continues to be solid flow of liquidations. The number of SPACs electing to liquidate their trust funds has risen to 19 for May and scheduled for June thus far. YTD, 107 SPACs have thrown in the towel and elected to liquidate. For 2023, we appear to still be on track to come close to, if not surpass, the record 146 liquidations that occurred last year. Although we have also seen quite a good number of deadline extensions being approved, pushing out SPAC merger deadlines well into 2024, there are still more than 100 SPACs (out of 245) facing deadlines in the next three months, with 40 in June. Thus, we appear to be on track to come close to, if not surpass, the record number of liquidations that occurred last year. Deal flow momentum. While the number of liquidations continues to mount, we continue to see a steady flow of merger activity. As of writing, 13 new SPAC merger deals have been announced MTD. Excluding the mega $27 billion BASQ/VinFast deal we highlighted in last week’s SPAC Talk, the average deal size continues to decline in value. But, for the VinFast deal, the average value of IBCs announced in May 2023 would be $275 million, the lowest average since before the SPAC euphoria took hold. Terminal value. There are currently 169 pending SPAC merger transactions awaiting completion. While the majority of those are expected to be completed, based on recent history, there is a statistical risk that one in five will be terminated. A not insignificant 18% of the 554 deals that have been announced since the start of 2021 have been terminated. Our SPAC Talk Focus in this edition delves further into the numbers, concluding that SPAC investors might have been thankful for small mercies.
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