SPAC Talk
August rush...the good. After a very quiet July, August has been buzzing with deal activity. August has brought 19 new SPAC merger deal announcements. This is the highest monthly total of the year, and we may not be done yet with one more week of the month left. Total deal value amounts to $9.1 billion at an average of $481 million per transaction, which is the highest level since the average of $586 million in January 2023, if we were to exclude the $27 billion BSAQ/VinFast transaction anomaly announced in May. This month’s tally includes a couple of deals in the billion-dollar range. The largest deal announced in August is the $1.58 billion proposed merger transaction between SPAC CVII and UK-based private equity CorpAcq. SPAC FNVT has a penned a $1 billion IBC transaction with China-based new energy heavy-duty vehicle manufacturer Scage International. August rush... the bad. Of course, entering into a merger agreement is no guarantee that it will close. On that note, it has also been quite busy on the flipside of the deal activity coin, with eight deal terminations occurring in August thus far, the second-highest monthly total of the year behind June’s 12. Among the August terminations is SPAC GGAA’s $312-million deal with travel technology firm NextTrip, which had only been penned in May. It’s also becoming a habit for GGAA as this is its second deal break this year. GGAA and biotech Biolog-id mutually terminated their similarly sized deal back in March. GGAA does have a deadline extension vote coming up on August 31, but that was scheduled prior to the latest deal cancelation. With 99.5% of the SPAC’s trust fund already redeemed as of June 30, 2023, it seems very likely now that this SPAC has only one option left – liquidation. Supercharged VinFast brings an eerie echo of past hype. Eight de-SPACings were completed in August. The most notable of these IBC completions is the $27 billion BSAQ/VinFast (VFS) transaction, barely three months after it was agreed. The VFS de-SPACing is the largest one since $33 billion MSP Recovery (LIFW) was de-SPACed in May 2022. Despite its initial rich valuation, the de-SPACed VFS has nevertheless made an impressive start to its publicly traded life, with a 254% surge in its share price, which brings back memories of the recent history of overhyped de-SPACs. We discuss this further in our SPAC Talk Focus.
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