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October 10, 2022

SPACs and IPOs
Negative headlines about SPACs have become so commonplace that they are no longer “sky is falling” stories. But when evaluating the speed of a falling object, isn't it worth asking if gravity is acting similarly on other bodies too?

To answer the question of SPAC performance, we must consider the context of the overall equity market. Therefore, we compared the performance of IPOs versus SPACs in calendar year 2022 YTD and found:
  • Total capital raised by new SPAC listings dropped from $128.7 billion to $12.7 billion – a drop of 90%. Whereas the total proceeds from IPOs dropped from $107.4 billion to $6.5 billion – a drop of 94%. SPAC listings raised nearly two times the proceeds of traditional IPOs.
  • The number of SPAC listings dropped from 447 in 2021 to 78 – a drop of 83%. Whereas the number of IPOs dropped from 313 to 64 – a drop of 80%. So far this year, there were 14 more SPAC listings than regular IPOs.
  • The average size of a SPAC listing was $162.8 million versus $101.6 million for IPOs – average listing proceeds of SPACs were 1.6x that of IPOs.
  • As of September end, newly listed IPOs had lost 51% of their listing value whereas deSPACs were down 49% from their listing price (weighted by actual cash deployed).
However, SPACs have the ability to raise additional capital at closing via PIPEs and other structured arrangements. If we consider capital raised by SPACs with deals closed from January through September 2022, we note:
  • Capital provided by PIPEs: $7.8 billion, which exceeds traditional IPO proceeds for the same period (see chart above)
  • Capital retained in SPAC Trust Accounts: $3.5 billion
  • A total investment of $11.3 billion in addition to $12.7 billion deployed in new SPAC IPOs.
  • Therefor, from January through September 2022, total cash deployed in IPOs was $6.5 billion versus $24 billion in SPACs.

It is also important to study the nature of the companies going public. For traditional IPOs, healthcare and TMT accounted for 60% of the IPO universe. Healthcare, financials and energy were the best performing sectors YTD due to market defensiveness, rising rates and rising oil prices. Industrials and real estate were the worst performing sectors with TMT also down more than 25%.

When we compare the industry composition of SPACs versus IPOs, we note that:
  • The best performing sectors (Healthcare, Financials and Energy) accounted for 42% of IPOs versus 30% of SPACs.
  • The worst performing sectors (Industrials, Real Estate) accounted for 9% of all IPOs versus 18% of all SPACs.
  • Despite the lower weighting of high-performing sectors and higher weighting of
    under-performing sectors, SPACs outperformed IPOs by 200 basis points.
News From the Past Week

Deal News

  • ClimateRock (CLRC) announced a deal to acquire E.E.W. Eco Energy World PLC, a global developer of utility scale solar photovoltaic projects from greenfield to ready-to-build. The deal reflects an equity value of $650mm and is expected to close in Q1 2023.

  • Freedom Acquisition I Corp. (FACT) announced a deal to acquire Complete Solaria, a solar technology, services and financing company. The deal reflects an enterprise value of $553mm and includes $7mm of convertible notes from T.J. Rodgers, Tidjane Thiam, Edward Zeng and Adam Gishen. The transaction is expected to close in H1 2023.

  • Pathfinder Acquisition Corporation (PFDR) announced a deal to acquire Movella, a full-stack provider of sensors, software and analytics. The deal reflects an enterprise value of $537mm and includes $75mm of committed financing from FP Credit Partners, L.P. The transaction is expected to close in Q1 2023.

  • Digital Transformation Opportunities Corp. (DTOC) announced a deal to acquire American Oncology Network, a network of community-based oncology practices. The deal reflects an enterprise value of $497mm and is expected to close in H1 2023.

  • TradeUP Acquisition Corp. (UPTD) announced a deal to acquire Estrella Biopharma, Inc., a preclinical-stage biopharmaceutical company focusing on cancer therapeutics. The deal reflects an equity value of $398.5mm and is expected to close in H1 2023.

  • Chardan NexTech Acquisition 2 Corp. (CNTQ) shareholders approved the company’s acquisition of Dragonfly Energy at a meeting Thursday 10/6/2022. The acquisition closed Friday 10/7/2022, and redemption statistics were not provided. Ordinary shares and warrants will begin trading on the NASDAQ as "DFLI" and "DFLIW" beginning Monday 10/10/2022.

  • GigCapital5, Inc. (GIA) signed an exclusive term sheet with QT Imaging, a medical imaging company that develops products for body imaging, with the goal of completing a business combination in 1H 2023.

  • Goldenstone Acquisition Ltd. (GDST) and Roxe Holding agreed to terminate their business combination agreement with neither party paying a termination fee.

  • Altitude Acquisition Corp. (ALTU) announced it is in negotiations with a global medical device manufacturer in a deal with an estimated enterprise value of approximately $480mm, with an LOI expected on or around 10/31/2022.

  • LAMF Global Ventures Corp. I (LAMF) is said to have held preliminary talks with English Premier League football club Everton FC.
New S-1's
Name Ticker Size ($mm) Underwriter Trust Funding Coverage
Plutonian Acquisition TBD 50 EF Hutton 101.8% W+R

IPOs
Name Ticker Raised ($mm) Sector Cash in Trust Coverage
Aquaron Acquisition Corp. AQU 50 Energy 101.5% R

Liquidations
Name Ticker Size ($mm) Announced Liq. Date Trust Per Share
Atlantic Avenue Acq ASAQ 250 10/3/2022 10/6/2022 $10.03
Avanti Acq AVAN 600 10/6/2022 10/20/2022 $10.06
Tekkorp Digital TEKK 250 10/4/2022 10/26/2022 $10.05
Lux Health Tech LUXA 345 10/7/2022 10/29/2022 $10.04
Sarissa Capital Acq SRSA 200 10/7/2022 10/31/2022 $10.05
Austerlitz I AUS 690 10/3/2022 TBD TBD
Austerlitz II ASZ 1380 10/3/2022 TBD TBD


Registrations Withdrawn
Name Ticker Size ($mm) Underwriter Trust Funding Coverage
Ascendant Mobility I AMOB 300 GS 101.5% 1/2
Lazard Fintech I LFTA 250 GS 100.0% 1/4
Lazard Healthcare I LHCA 250 GS 100.0% 1/4
Aries II RAMX 130 Oppenheimer 101.0% 1/2

Charter Extensions

  • MBTC extended its charter through 4/5/2023 with a $100,000 ($0.069 per share) monthly contribution to trust and 13% of public shares remaining.
  • JMAC extended its charter through 1/13/2023 with a single $0.10 per share sponsor contribution to trust.

Upcoming Meetings and Deadlines

  • 10/10/2022 DWAC Charter extension meeting
  • 10/11/2022 ALTU Liquidation deadline
  • 10/11/2022 GWII Charter extension meeting (liquidation deadline 10/14/2022)
  • 10/11/2022 ACEV Charter extension meeting (liquidation deadline 10/13/2022)
  • 10/12/2022 MLAC Charter extension meeting (liquidation deadline 10/17/2022)
  • 10/13/2022 JMAC Liquidation deadline (pending $0.10 deposit extension)
  • 10/13/2022 BTWN Charter extension meeting (liquidation deadline 10/20/2022)
  • 10/14/2022 AXH Charter extension meeting (liquidation deadline 10/22/2022)
  • 10/14/2022 IPOD Liquidation at ~$10.01 per share
  • 10/14/2022 IPOF Liquidation at ~$10.01 per share
  • 10/14/2022 GWII Liquidation deadline
  • 10/15/2022 FATP Liquidation deadline (pending $0.15 deposit extension)
  • 10/15/2022 ALSA Liquidation deadline (pending $0.033 deposit extension)
  • 10/16/2022 FVAM Liquidation at ~$10.00 per share
  • 10/17/2022 HZON Charter extension meeting (liquidation deadline 10/22/2022)
  • 10/17/2022 BRLI Charter extension meeting (liquidation deadline 10/23/2022)
  • 10/18/2022 LMAO SeaStar Medical approval meeting
  • 10/19/2022 CLOE Charter extension meeting (liquidation deadline 10/22/2022)
  • 10/19/2022 BMAQ Charter extension meeting (liquidation deadline 10/21/2022)
  • 10/19/2022 SANB Liquidation deadline
  • 10/20/2022 TMPM Liquidation deadline
  • 10/20/2022 ENPC Granite Ridge Resources approval meeting
  • 10/20/2022 DHAC Charter extension meeting
  • 10/20/2022 APAC Liquidation deadline (pending $0.05 deposit extension)
  • 10/21/2022 VENA VIYI Algorithm approval meeting
  • 10/21/2022 BOAS Selina approval meeting (merger outside date 10/25/2022)
  • 10/21/2022 FEXD Liquidation deadline (pending $0.10 deposit extension)
  • 10/22/2022 FOXW Liquidation deadline (pending $0.0125 deposit extension)
  • 10/23/2022 LFTR Liquidation deadline
  • 10/23/2022 SRSA Liquidation deadline
  • 10/23/2022 HIGA Liquidation deadline
Disclosures: Site administrators may maintain positions in various SPAC securities and may trade in or out of those securities at any time without notice. Information from spacresearch.com is provided for informational purposes only and should not be relied upon as the basis for any investment decision. Nothing on spacresearch.com is a recommendation or solicitation to buy or sell any investment.
Copyright © 2022 SPAC Research, All rights reserved. SPAC Research is the source of all data unless otherwise noted.

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