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October 11, 2021
Welcome to the SPAC Research weekly newsletter.

Financing and Deal Trends
Despite the challenging environment and the prevalence of anchor commitments, the SPAC IPO market is still chugging along raising roughly $5-6bn per month.
But deal announcements are slowing down. September featured only 12 new transactions, with just $1.2bn of committed PIPE capital. As you can see in the chart below, that's the lowest number in over a year.
Experienced sponsorship and committed capital matter more than ever. In a world where PIPE investors are extremely selective, deals with a sponsor who is investing meaningful dollars alongside the transaction have a significant leg up. And given the ongoing regulatory scrutiny focused on the SPAC concept, alignment of all parties' interests is critical.

So we wanted to revisit a study from earlier in the year where we looked at trends in sponsor promote retention and lockup duration. Back in May, we saw that as the market had cooled off, sponsors' promotes were under pressure and and a much smaller proportion of deals were featuring full unconditional promote retention than during the boom months from Q4 2020 and Q1 2021.

You can see below that the market is still roughly in the same place as it was back then for promote forfeitures. Roughly half of all deals include full promote retention, though the fraction of deals where the sponsor has forfeit or put greater than half of their promote into an earnout has increased slightly.
On the lockup side, the market has remained fairly consistent as well. Between 10-20% of deals are seeing the longest tranche of sponsor lockups pushed out past two years after closing. And the majority of deals are still seeing the longest tranche locked up for between 1-2 years.
It's tough to normalize across cycles given how volatile the market has been. But we've written previously about the correlation between sponsor alignment and successful deSPAC performance.

As Q2 and Q3's deals become more seasoned in the market, we look forward to comparing the data above to individual deals' actual stock prices to see how each cohort of promote retention and sponsor lockup duration have performed.
News From the Past Week

Deal News

  • FirstMark Horizon Acquisition Corp. (FMAC) announced a deal to acquire Starry, Inc., a next generation licensed fixed wireless technology developer and internet service provider. The deal reflects an enterprise value of $1.66bn and includes a $130mm PIPE with investors including ArrowMark Partners, Atreides Management, and Fidelity Management & Research Company LLC. The transaction is expected to close in Q1 2022.

  • Helix Acquisition Corp. (HLXA) announced a deal to acquire MoonLake Immunotherapeutics AG, a clinical-stage biotechnology company focused on creating next-level therapies for inflammatory skin and joint diseases. The deal reflects an enterprise value of $360mm and includes a $115mm PIPE led by Cormorant Asset Management. The transaction is expected to close in Q4 2021 or early Q1 2022.

  • Goldenbridge Acquisition Limited (GBRG) announced a deal to acquire AgiiPlus, a work solutions provider for rapid-change, quick-pivot enterprises in China and Singapore. The deal reflects an enterprise value of $578mm and AgiiPlus aims to raise $35mm through PIPE transactions. No closing timeline was given.

  • Supernova Partners Acquisition Company II, Ltd. (SNII) announced a deal to acquire Rigetti, a full-stack quantum computing provider. The deal reflects an enterprise value of $1.15bn and includes a $100mm PIPE with investors including T. Rowe Price Associates, Bessemer Venture Partners and Franklin Templeton. No closing timeline was given.

  • LifeSci Acquisition II Corp. (formerly LSAQ) closed its acquisition of Science 37 on Thursday 10/7/2021. Redemption statistics were not provided. Ordinary shares are now trading on the NASDAQ as “SNCE.”

  • Industrial Tech Acquisitions, Inc. (formerly ITAC) closed its acquisition of Arbe Robotics on Thursday 10/7/2021 with 23.6% of public shares remaining. Ordinary shares and warrants are now trading on the NASDAQ as “ARBE” and “ARBEW.”

  • ACON S2 Acquisition Corp. (STWO) shareholders approved the company’s acquisition of ESS Tech with 16.9% of public shares remaining. No closing timeline was given.

  • Bloomberg reported that RedBall Acquisition Corp. (RBAC) is in talks with mobile-focused ticket platform SeatGeek.

New S-1's
  • Semper Paratus Acquisition Corp (LGST) $300mm funded at 102%
  • Decarbonization Plus Acquisition Corporation V (DCRE) $275mm funded at 101%
  • Iconic Sports Acquisition Corp. (ICNC) $250mm funded at 102.5%
  • ExcelFin Acquisition Corp. (XFIN) $200mm funded at 102%
  • Innovative International Acquisition Corp. (IOAC) $200mm funded at 102%
  • LAMF Global Ventures Corp. I (LGVC) $200mm funded at 102%
  • Onyx Acquisition Co. I (ONYX) $200mm funded at 102%
  • TKB Critical Technologies 1 (USCT) $200mm funded at 102%
  • Pyrophyte Acquisition Corp. (PHYT) $175mm funded at 102.5%
  • OmniLit Acquisition Corp. (OLIT) $125mm funded at 102%
  • OPY Acquisition Corp. I $100mm funded at 101%
  • Mountain Crest Acquisition Corp. V (MCAG) $50mm funded at 100%
IPOs

  • Enphys Acquisition Corp. (NFYS) raised $300mm for the acquisition of businesses that predominantly operate in Ibero-America and whose business strategy is aligned with energy transition and sustainability themes. The trust account was funded at 100% and units contain one-half warrant coverage.

  • Crixus BH3 Acquisition Company (BHAC) raised $230mm for an acquisition of businesses that manage, finance, operate, construct, control, own or support real estate or that derive a large component of revenue from real estate, construction or infrastructure activities. The trust account was funded at 100% and units contain one-half warrant coverage.

  • Hawks Acquisition Corp (HWKZ) raised $200mm without a specific sector focus. The trust account was funded at 100% and units contain one-half warrant coverage.

  • IX Acquisition Corp. (IXAQ) raised $200mm for an acquisition in technology, media and telecommunications and information and communication technology, specifically the telecommunications infrastructure, internet and technology and digital services sectors operating in Europe and emerging markets. The trust account was funded at 100.5% and units include one-half warrant coverage.

  • Learn CW Investment Corporation (LCW) raised $200mm for an acquisition in edtech. The trust account was funded at 101% and units contain one-half warrant coverage.

  • Avalon Acquisition Inc. (AVAC) raised $180mm for an acquisition in financial services sectors that are undergoing radical change as a result of demographic shifts, changing consumer preferences, technological disruption and other innovative forces. The trust account was funded at 101.5% and units contain three-fourths warrant coverage.

  • Mount Rainier Acquisition Corp. (RNER) raised $173mm for an acquisition of an established, technology-focused business. The trust account was funded at 102% and units contain three-fourths warrant coverage.

  • Phoenix Biotech Acquisition Corp. (PBAX) raised $155mm for an acquisition in healthcare or healthcare-related industries in the United States and Europe. The trust account was funded at 102% and units contain one-half warrant coverage.

  • Schultze Special Purpose Acquisition Corp. II (SAMA) raised $150mm for an acquisition of a business that has experienced a financial restructuring. The trust account was funded at 101% and units contain one-half warrant coverage.

  • Maxpro Capital Acquisition Corp. (JMAC) raised $90mm for an acquisition in healthcare and technology. The trust account was funded at 101.5% and units contain whole warrant coverage.

  • Parsec Capital Acquisitions Corp (PCX) raised $75mm for an acquisition in space economy, transport and technology. The trust account was funded at 101.5% and units contain full warrant coverage.

Upcoming Meetings and Deadlines
  • 10/12/2021 LOKB Navitas Semiconductor approval meeting
  • 10/13/2021 MRAC Enjoy Technology approval meeting (outside date 10/28/2021)
  • 10/13/2021 PAIC Liquidation deadline (results not yet released from 10/8 extension meeting)
  • 10/14/2021 LEGO Algoma Steel approval meeting
  • 10/14/2021 HZAC Vivid Seats approval meeting (outside date 10/21/2021)
  • 10/14/2021 VIH Bakkt approval meeting (outside date 10/20/2021)
  • 10/19/2021 GSAH Mirion Technologies approval meeting
  • 10/19/2021 BOWX WeWork approval meeting
  • 10/20/2021 BCYP SAB Biotherapeutics approval meeting
  • 10/20/2021 SGAM Redbox approval meeting
  • 10/20/2021 KURI Babylon approval meeting
  • 10/22/2021 ALAC Charter extension meeting (liquidation date 10/26/2021)

Links

  • Business Insider reported that the SEC has issued an "investigative subpoena" to Circle, which is the principal operator of Stablecoin USDC and the acquisition target of Concord Acquisition Corp. (CND).

  • Institutional Investor reported that the House Financial Services Committee is working on legislation targeting the recommendation of SPAC deals and SPAC founder shares.

  • Serial SPAC sponsor Betsy Cohen predicted that 30% of SPACs in the market will fail.

  • Short-seller Scorpion Capital published a short thesis on recent deSPAC Ginkgo Bioworks (formerly SRNG).
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