Despite the dramatic deflation of SPAC-mania in recent months — and a downturn in the broader market — some SPACs are still announcing new mergers, Axios notes.
The SPAC category’s demise has been heavily predicted by skeptics of the model, but it hasn’t quite happened yet. Between Jan. 1 and April 18 of this year, 38 mergers with U.S.-listed SPACs were announced, plus three more globally, per Dealogic data.
Meanwhile, a whopping 609 U.S.-listed SPACs are still searching for acquisition targets as of April 22 — up from 551 at the end of 2021.
This year’s deals have been smaller in general, says SPAC Research founder Ben Kwasnick.
The shrinking deal sizes are in part because of difficulty obtaining PIPE financing, since it’s harder to get large deals done with less committed capital.
Investors have also pulled back from accepting sky-high tech company valuations based on aggressive growth projections. And shrinking trading multiples for public comps are affecting merger values, according to a recent SPAC Research note.
Yes, but large deals haven’t completely vanished. Read more.
