Spotlight on SPACs

15 September 2020

‘Spotlight on SPACs’ is a new weekly column that tracks the latest news, data, and analysis on special purpose acquisition vehicles, drawing on proprietary intelligence from Mergermarket and Dealreporter, as well as data from Dealogic. 

 

The report, published weekly, features forward-looking insight on what to expect in SPAC M&A, as well as a pipeline of upcoming SPAC IPOs on file in the US.

 

In this inaugural edition, we also take a look at the record amount of proceeds SPACs have raised on US exchanges in 2020 and rank their bookrunners by deal value.

 

Proceeds raised in 2H already double record amount raised in 1H

 

After a record-setting haul in the first half of the year, special purchase acquisition companies (SPACs) doubled the amount of capital they raised on US exchanges in the second. 

 

And it’s only September.

 

There have been 58 initial public offerings of SPACs in the US so far in the third quarter, raising USD 25.4bn, according to Dealogic. The first half of the year saw 37 deals that raised USD 11.96bn.

 

The 95 SPAC listings that have generated USD 37.3bn so far in 2020 compare to 59 SPAC listings that raised USD 13.5bn in 2019, and 46 listings that produced USD 10.77bn in 2018. This year’s record haul is more than half of all the previous years combined dating to 1995, when Dealogic first began collecting data.

 

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Credit Suisse tops bookrunner list

 

Unprecedented interest in SPACs is generating healthy income streams for investment banks, which have reconfigured their equities teams to capitalize on the deal flow. 

 

Even though SPACs have been around since the 1980s, Goldman Sachs did not underwrite its first SPAC until 2016. This year it ranks as the third largest SPAC underwriter, and it is among the top five SPAC underwriters since 2018.

 

Credit Suisse has underwritten 17 SPACs totaling USD 5.87bn so far this year, followed by Citi with 16 deals totaling USD 5.87bn, Goldman Sachs with 16 deals totaling USD 4.43bn, UBS with 13 deals totaling USD 3.53bn, and Jefferies with 10 deals totaling USD 3.03bn.

 

Cantor Fitzgerald, which was the top underwriter last year, finished with the sixth largest share of SPAC IPO volume, taking nine deals to market that totaled more than USD 2.3bn. Deutsche Bank, which ranked second in 2019, has fallen to eighth, year to date with 10 deals totaling USD 1.8bn.

 

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What’s happening

 

  • Sportradar, a Switzerland-headquartered sports data and betting company backed by billionaires Mark Cuban and Michael Jordan, is exploring plans for a near-term IPO after distributing requests for proposals in August, this news service reported Thursday. The company invited investment banks to pitch for roles on a prospective listing after receiving inbound interest from a SPAC that valued the company in excess of USD 4bn.
  • TWC Tech Holdings [NASDAQ:TWCTU], which raised more than USD 600m in its IPO on Thursday, is looking to buy private, high-growth, technology companies valued between USD 1bn and USD 10bn, according to the prospectus it filed on Friday. The San Francisco-based company is led by CEO Adam Clammer and Chairman Jamie Greene. Citigroup and Deutsche acted as bookrunning managers for the IPO.
  • Vistas Media Acquisition Company [NASDAQ:VMACU], a New York-based SPAC, is considering which financial and legal advisors to hire for its initial acquisition and business combination target, executives recently told this news service..
  • CuriosityStream will look to acquire niche nonfiction video-on-demand content after the Silver Spring, Maryland-based media company goes public through a reverse merger with Software Acquisition Group [NASDAQ:SAQN] in 4Q, a top executive recently told this news service..
  • Software Acquisition Group II, the second blank-check company in 10 months from the same pair of technology executives, is seeking a target with an enterprise value as high as USD 2bn, the CEO recently told this news service. The “sweet spot” for a deal is between USD 350m and USD 1bn, he said, but it could finance a transaction as high as USD 2bn if it raised more capital through a private investment in public equity (PIPE).
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