ICR, a leading strategic communications and advisory firm, today released its Q2 2020 SPAC Update report: “Are SPACs Driving the Democratization of IPOs?” SPAC IPO issuance has accelerated as improved deal structures, high quality SPAC sponsors and blue chip institutional investors converge. Strong SPAC IPO activity has resulted in 121 public SPACs holding more than $34 billion in cash as of June 30, 2020.
“SPACs are transforming the IPO market, with improved structures and marketing techniques. In fact, a Robinhood or Schwab retail investor has the same access to forward looking information and SPAC shares as Blackrock or Fidelity, which truly levels the playing field,” said Don Duffy, President of ICR. “High quality SPAC sponsors are finding great merger partners, and investors prefer the structure because they are able to buy stock freely in the open market, not beholden to the IPO ECM process which most often favors a few select institutional investors.”
In the second quarter of 2020, 23 SPACs raised approximately $8.0 billion, exceeding Q2 2019 issuance of $4.0 billion. Despite no SPAC IPO activity between March 10 and April 21, 34 SPAC IPOs have priced since then, bringing the total for the first half of 2020 to $12.0 billion, exceeding H1 2019 issuance of $7.3 billion.
The third quarter is already seeing a high level of SPAC issuance activity, with 11 SPAC IPOs in July:
7/22/2020 | Pershing Square Tontine Holdings, Ltd. | NYSE: PSTH.U | $4,000,000,000 | |||
7/22/2020 | Property Solutions Acquisition Corp. | $200,000,000 | ||||
7/16/2020 | Deerfield Healthcare Technology Acquisitions Corp. | $143,750,000 | ||||
7/16/2020 | HPX Corp. | $253,000,000 | ||||
7/15/2020 | D8 Holdings Corp. | $300,000,000 | ||||
7/15/2020 | Malacca Straits Acquisition Company Limited | $125,000,000 | ||||
7/14/2020 | Artius Acquisition Inc. | $724,500,000 | ||||
7/13/2020 | PTK Acquisition Corp. | $115,000,000 | ||||
7/8/2020 | Therapeutics Acquisition Corp. | $135,700,000 | ||||
7/2/2020 | Capstar Special Purpose Acquisition Corp. | NYSE: CPSR.U | $240,000,000 | |||
7/1/2020 | Panacea Acquisition Corp. | NYSE: PANA.U | $125,000,000 |
“To be successful, SPACs need an experienced team of advisors that understands the de-SPAC process, the industry of the target business, the challenges related to announcing an acquisition, and the shareholder vote process,” said Phil Denning, Partner at ICR. “In addition, proxy advisory firms are weighing in more frequently on SPAC mergers as the deal size and institutional interest grows.”
A successful listing of a SPAC is just the beginning of an approximately 18-24 month period for it to complete a successful business combination. The de-SPAC process begins once the SPAC announces its proposed acquisition, representing the start of a high-stakes, condensed timeline to complete the transaction. Once the merger closes, the target business essentially becomes the successor public company and to be successful, it’s critical that these companies have the investor relations and public relations capabilities along with public company infrastructure in place. In addition, private investors that rolled over equity will eventually want a liquidity event, so every management team will need a capital markets advisor with specific SPAC-related experience.
“Following the deal, we are helping these newly-public companies transition effectively to public market life with proactive IR and corporate PR programs that substantially enhance their profile,” said Lee Stettner and Steve Parish, Co-Heads of Capital Markets at ICR Capital. “This is especially critical because these companies frequently have to prepare to raise additional equity capital or provide liquidity to pre-public shareholders through a follow-on offering in the months following the closing of the merger. These companies are leveraging ICR’s capital markets expertise to help them with these important transactions.”
ICR is the largest advisor and communications consultant to SPACs, having completed dozens of transactions over the past decade. To obtain a copy of ICR’s Q2 2020 SPAC Update report please click here.
About ICR
Established in 1998, ICR partners with its clients to execute strategic communications and advisory programs that achieve business goals, build awareness and credibility, and enhance long-term enterprise value. The firm’s highly-differentiated service model, which pairs capital markets veterans with senior communications professionals, brings deep sector knowledge and relationships to more than 750 clients in approximately 20 industries. ICR’s healthcare practice operates under the Westwicke brand (www.westwicke.com). Today, ICR is one of the largest and most experienced independent communications and advisory firms in North America, maintaining offices in New York, Norwalk, Boston, Baltimore, San Francisco, San Diego and Beijing. Learn more at www.icrinc.com. Follow us on Twitter at @ICRPR.
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