Behind The Hype: Are SPACs A Good Route To Exit?

In this feature piece in Crunchbase, Pierre Suhrcke, discusses why the popularity of special purpose acquisition companies, or SPACs, has exploded in the last year. According to Pierre, while they have been around for many years, it is only in the last couple that their use has accelerated.

As Pierre states, “According to one report, globally 200 SPACs raised $64 billion in 2020, just under the $67 billion raised by 194 initial public offerings in the same year. Suhrcke further argues that, “To date, U.S.-based investors have led the way when it comes to SPAC deals, thanks in part to tighter investment regulations and fewer potential sponsors in Europe, but that doesn’t look like it will remain the case.

Ian Osborne, one of the pioneers of SPACs in the U.S., is reported to be planning to list a European-based shell company on the Euronext, joining the likes of ex-Credit Suisse CEO Tidjane Thiam and French billionaire Xavier Niel, both of whom recently launched SPACs.

Elsewhere, executives at a number of European exchanges, including Frankfurt, expect to see a surge in SPACs in the next couple of years. SPAC activity in the U.K. has been hampered by listing rules that require trading in a listed company to be suspended when it announces an acquisition intention. However, this is currently under review as part of the Financial Conduct Authority’s consultation into SPACs, due to be completed in the summer of 2021. Should the FCA amend the trading suspension rules, it could propel SPAC activity in the U.K. forward.”

You can read the full article in Crunchbase.

Source: Crunchbase