Actionable Ideas for Companies and Sponsors

SPACs Becoming a Viable Competitor for Significant M&A Transactions

SPAC issuance in 2018 set a new record of $10.7 billion across 46 deals. Driving this new issuance growth is the underlying success of SPACs in delivering M&A exits of scale. In 2017, there were 10 acquisitions by SPACs greater than $500 million and total exit value doubled to $14.3 billion. And in 2018, there have been 11 such transactions and total exit value increased over 40% to $20.2 billion. This trend in SPAC acquisitions is expected to continue with the rapid rise in private equity firms sponsoring SPACs and financial sponsors’ expertise in identifying targets and competing in auctions. With $13.6 billion of equity dry powder, SPACs have now become a credible buyer for significant transactions.