SPAC Activity Falls In Q2: Behind The Numbers And The Largest Announced Deals

The number of SPAC IPOs and announced deals hit a downtrend in the second quarter and could show signs of further declines going forward.

What Happened: SPAC IPOs peaked in the first quarter of 2021, hitting a total of 275. The second quarter saw 52 SPAC IPOs, according to a new S&P Global report.

The second quarter marked the lowest quarter of SPAC offerings since last year's second quarter, which had 23. The past three quarters had offerings of 76, 117 and 275, respectively.

Money raised from SPAC offerings was $11.7 billion in the second quarter, also significantly down from the $91.37 billion raised from offerings in the first quarter.

“The SPAC IPOs came to a screeching halt after guidance from the SEC prompted the vehicles to redetermine whether warrants they offered to investors were accounted for appropriately on their balance sheets as debt or equity,” the report says.

SPAC IPO volume did pick up outside of the U.S. where the amount of money raised was up 8% in the second quarter compared to the first quarter.

The largest SPAC deals announced in the second quarter were:

Soaring Eagle Acquisition Corp SRNG acquiring Ginkgo Bioworks at a $16.7 billion value.

Sports Entertainment Acquisition Corp SEAH acquiring Super Group in a deal valuing the company at $6.45 billion.

Northern Genesis Acquisition Corp II NGAB acquiring Embark Trucks in a $4.2 billion deal.

VPC Acquisition Holdings III VPCC acquiring Dave at a $3.50 billion valuation.

Yucaipa Acquisition Corp YAC acquiring Signa Sports valuing the company at $2.92 billion.

Related Link: 5 Long Term SPACs For Investor To Consider

Why It’s Important: There are 440 SPACs actively searching for an acquisition target, according to data from SpacInsider.com.

The SEC continues to put pressure on SPACs and has announced it is looking into the way the deals are structured, which could delay the IPOs of new SPACs and also the approval of deals to get to merger vote dates.

There have been 135 announced deals for SPACs year-to-date in 2021. With hundreds of SPACs still looking for targets and the SEC being more active, the number of SPAC offerings could decline further in the third quarter.

Disclosure: Author is long SRNG shares. 

Photo: Luis Villamil via Unsplash