- Number of SPAC IPOs has stagnated since April
- Potential reason could be a Statement from U.S. Securities and Exchange Commission (SEC)
- 611 SPAC IPOs since May 2020
Munich, May 18, 2021 – The boom around Special Purpose Acquisition Companies (SPAC) has suffered from a cool off since April. The number of SPAC IPOs as well as the number of SPACs currently in the IPO pipeline have declined significantly since last month. This is the result of an analysis by Munich-based financing specialist FCF Fox Corporate Finance GmbH. Since May 2020, 611 SPACs have been successfully listed on a public stock exchange. More than half of the IPOs took place within the first quarter of 2021 (317 IPOs). The current SPAC IPO pipeline consists of 324 SPACs.
“A potential reason for the current stagnant situation could be an official statement by the U.S. Securities and Exchange Commission (SEC) published in mid-April 2021”, explains Dr. Mathias Schott, head of FCF Life Sciences. The SEC expressed its concerns regarding the current treatment of SPAC warrants as equity. The warrants may need to be re-classified as liabilities depending on the payout structure, settlement in cash or stock, or whether their value is tied solely to the performance of the underlying stock. The potential change in accounting may cause a delay in the process and additional costs as SPACs that have announced their IPO may need to adjust their financial statements and have them re-audited.
In total, SPACs have acquired healthcare companies for USD 3.54bn – currently valued at a market capitalization of USD 17.16bn. 47 percent of the merged SPACs have shown a positive share price development since the announcement, whereas 53 percent have experienced a negative development.
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ABOUT FCF FOX CORPORATE FINANCE
FCF is a specialized Investment Bank and Financing Specialist, advising public and private small/mid-market companies in the German speaking regions.FCF focuses on four primary client segments:
- MidCap: Medium-sized companies with sustainable business models in typical “Mittelstand” industries, such as industrial products and machinery, automotive, communications, logistics, and consumer products
- SmallCap / Growth: Companies with revenues between €20 and €100 million and high / above average growth rates
- DeepTech: R&D-driven companies in technology sectors, entering the commercialization stage with initial fast-growing revenues
- Life Sciences: Highly innovative companies focusing on the development of cutting-edge biotechnology, med-tech, health-tech and pharmaceuticals solutions
FCF structures, arranges and places equity and debt capital transactions and supports its clients’ growth, IPO/Pre-IPO, acquisition and standard balance sheet (re-)financing strategies.
Founded in 2005 and headquartered in Munich, FCF has direct relationships and works with all leading German, European and international financiers, lenders and investment houses addressing German small/mid-cap companies.