Sat, Sep 26, 2020
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Proskauer releases SPAC IPO study analyzing deal terms and trends for red-hot market

Wednesday, August 05, 2020
Opalesque Industry Update - Proskauer, an international law firm, released its 2020 SPAC IPO Study. The study examines data from 95 Special Purpose Acquisition Company (SPAC) IPOs priced from January 2016 through June 2020, representing over half of the SPACs listed on U.S. exchanges. Utilizing this proprietary data, the study provides detailed comparisons of deal structures and terms and insight into market trends year-over-year.

"The SPAC IPO market has been resurgent in recent years and has continued to accelerate through the summer of 2020. SPACs have gained a foothold as a preferred vehicle for private companies to enter the public markets in these volatile times." said Daniel Forman, a partner in Proskauer's Capital Markets Group.

The following are some key findings from the study:

1. From 2016 through 2019, SPAC IPOs were on the rise in terms of both absolute number of deals and gross proceeds raised. Based on the first half of 2020, this year is on track to surpass 2019 on both measures.

2. Through the first half of 2020, there has been a notable uptick in SPAC IPOs with deal sizes of greater than $301mm as a percentage of the total market.

3. 56% of the SPAC IPOs we analyzed had an acquisition period of 24 months, followed by 18 months at 27%. The acquisition period varied significantly more among smaller SPACs.

4. In addition to proceeds raised in the IPO, some SPACs enter into forward purchase contracts in order to secure additional capital for the initial business combination. 19% of the SPACs in our study disclosed the existence of a forward purchase contract. The larger the deal size, the more frequently a forward purchase contract was disclosed.

5. Of the SPAC IPOs priced from 2016 through 2019, over half have completed an initial business combination with only 5% having returned funds to investors and winding-up operations. The average number of days it took for a SPAC IPO to sign its initial business combination was 440. It then took, on average, an additional 148 days to close the initial business combination.

6. Approximately two-thirds of the SPACs that completed initial business combinations had raised additional equity financing in the form of a PIPE (private placement for public equity) concurrently with the closing of the business combination.

"We expect market participants, including sponsors, investment banks and investors, will benefit from our detailed analyses of the terms and trends underlying this active space," said Lily Desmond, a senior counsel in Proskauer's Capital Markets Group.

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing: Tech stocks aren't in a bubble, but investors should be pickier, Credit Suisse says, Pandora tops world's best-performing market as hedge funds exit, What Bill Ackman is investing in now[more]

    Tech stocks aren't in a bubble, but investors should be pickier, Credit Suisse says From Business Insider: Credit Suisse on Thursday trimmed its overweight rating for tech stocks, recommending investors be more selective with their sector picks. Crowding in tech giants and the stocks&#

  2. Investing: Third Point buys stakes in Facebook, Alibaba in Q2, exits Sony, Allergan, Here's what investors with $3.4tn are buying during covid, An energy trader seeks profit from batteries in European markets, Hedge fund ARCM to sell $200m of Premier Oil debt[more]

    Third Point buys stakes in Facebook, Alibaba in Q2, exits Sony, Allergan Third Point LLC acquired new stakes in Facebook Inc. and Chinese e-commerce companies Alibaba Group Holding Ltd. and JD.com Inc. during the second quarter of 2020 as it divested positions in Sony Corp. and drugmaker

  3. PE/VC: Investors have bet big that you can get private equity returns in the public markets. A new study says otherwise, Aberdeen's Bonaccord teams up with CAZ to buy stakes in private markets managers, The role of private equity in economic recovery from Covid-19[more]

    Investors have bet big that you can get private equity returns in the public markets. A new study says otherwise From Institutional Investor: New research suggests private-equity-owned firms respond differently to financial distress - and that the resulting performance "cannot be replicat

  4. Opalesque TV: Meet a Swiss fund manager who hedges with a difference[more]

    B. G., Opalesque Geneva: There is a quant manager in Zurich that does things a little differently, which has helped a lot so far this year. ICON Asset Management, which was mentioned in the

  5. Franklin Templeton creates new unit with QS Investors[more]

    Laxman Pai, Opalesque Asia: Franklin Templeton will combine recently acquired QS Investors, a Legg Mason subsidiary, with Franklin Templeton Multiasset Solutions (FTMAS) business into a single consolidated unit. Effective Oct. 1, the combined business, called Franklin Templeton Investment Sol