SPAC IPO issuance in the second quarter of 2021 normalized following the record activity seen in the first quarter of 2021, with 60 SPACs raising $12.8 billion, an increase of 160% and 60%, respectively, when compared to the second quarter of 2020, when 23 SPACs raised $8 billion. In addition, nearly 300 SPACs were on file with the SEC to raise more than $70 billion as of June 30, 2021.
“SPAC IPO issuance returned to a more sustainable level in Q2 from the record pace in Q1,” said Lee Stettner, Co-Head of Capital Markets at ICR Capital. “We continue to see the SPAC IPO issuance market shift toward serial SPAC sponsors and PE-backed SPACs as investors recognize these organizations have large deal teams, strong deal flow, substantial capital to invest and M&A expertise.”
The pace of SPAC merger announcements was steady, with 69 announcements in Q2 2021 following 72 in Q1 2021. ICR served as financial communications advisor for investor relations and/or public relations on approximately half of all announced deals in 2021 and more than 100 SPAC transactions since 2020.
“ICR participated in a record number of SPAC transactions in the first half of 2021,” said Don Duffy, President of ICR. “SPACs, companies, and their investors are seeking communications advisors that bring capital markets expertise, investor relations, deal communications, and PR to the table, and we are the largest integrated global platform to deliver that.”
Companies must be prepared to market the transaction benefits for the entire de-SPAC period of approximately four to five months. SPAC sponsors and companies should also be prepared for critical pre-closing shareholder vote activity and important post-closing disclosure and reporting policies.
“SPAC merger announcements require more complex and advanced planning as investors and media outlets have grown less interested in the ‘next’ SPAC merger,” said Phil Denning, Partner at ICR. “SPAC merger shareholder votes are also getting more complicated as ISS continues to recommend that investors vote against most deals, which can cause a spike in redemptions. We are assisting clients in unique ways to drive voter awareness and participation in order to produce optimal outcomes and mitigate redemptions.”
The recent increase in SPAC redemptions has also impacted post-merger access to capital and shareholder targeting.
“We advise post-merger companies on strategies to streamline their cap table and improve their share liquidity in order to attract high quality equity investors,” said Niren Nazareth, Managing Director, ICR Capital. “In Q2 2021, executive teams engaged our services on warrant mitigation and concentrated ownership stakes more actively than in Q1.”
ICR is the largest advisor and communications consultant to SPACs, having worked on more than 120 transactions over the past decade and half of all SPACs announced in 2021. To obtain a copy of ICR’s Q2 2021 SPAC Market Update report, please click here.
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 and Beijing. Learn more at www.icrinc.com. Follow us on Twitter at @ICRPR.