Jefferies

Actionable Ideas for Companies and Sponsors

Record SPAC Issuance Will Continue Throughout 2018

With 24 SPAC IPOs priced this year, 2017 has become the most active year for SPAC IPOs in over a decade. We expect SPAC issuance to continue to be strong throughout 2018 because of a number of factors including: (i) the universe of SPAC sponsors has expanded beyond executives with deep sector expertise and public market experience to now include financial sponsors and venture capital firms; (ii) the emergence of more favorable SPAC structures; (iii) dedicated SPAC institutional investors who are now able to recycle/reinvest capital into new SPAC IPOs; (iv) sector-focused institutional investors, who are increasing their participation in SPAC IPOs, as they are now seeing evidence that the SPAC structure can work; and (v) the successful completion of acquisitions on the back end. Regarding the latter, in 2017 YTD, nine SPACs have completed acquisitions, including three acquisitions between $850 million and $3.8 billion, and an additional 13 acquisitions are pending.