SPAC Wrap: Issuance Has Screeched to a Halt While the Market Clears Out

SPAC issuance has screeched to a halt. A single IPOs and M&A Deal as LATN agrees to buy Procaps and ends the day flat.
Author:
Publish date:

As we've been speaking about, the SPAC market is now almost officially in park. With ~300 IPOs already priced in 2021, there have been very few days with zero or few new deals that began trading, but that's exactly what we got Wednesday. 

It makes sense that deals are standing down given market conditions, perhaps teams are waiting for more attractive market conditions to price. In addition, Bloomberg reports that the bankers and lawyers are drowning in paperwork, which could also be delaying deal flow. It's a confluence of factors brought on by the fact that the SPAC market's pipe is only so big and there was too simply too much trying to flow through.  

That being said, this is actually positive news for investors looking to find attractive value in pre-deal SPACs. Instead of chasing the next hot IPO --most new issues are trading below NAV (and vintages matter today) -- investors should look for Pre (or announced) Deal SPACs with solid management track records, which could offer a fantastic risk/reward dynamic. 

Elsewhere... New York has legalized Cannabis, see what that might mean for SPACs.

SPAC M&A Update

Just one new deal announcement came Wednesday morning, with Union Acquisition Corp II (LATN) agreeing to a $1.1B EV deal with Procaps, a LatAm Pharmaceuticals company. LATN barely budged today, closing up 1 cent to $10.05 after today's trading. 

See the investor deck with full financial projections and deal overview here. 

Foley Trasimene Acquisition Corp. II (BFT), a SPAC sponsored by Cannae Holdings, closed its transaction with Paysafe, and began trading today as PSFE. Shares got hammered, down (10.6)% on the day.  

Today's SPAC investors have to consider when the time is right to get out on SPACs with announced deals. If there is a deal pop it may be smart to capitalize and get out quickly thereafter. But, investors with a bullish longterm de-spac view may have to suffer through some post de-SPAC volatility to reap the benefits. 

Biggest daily GAINS

14.10% ~ $ 17.88 | ACTC - ArcLight Clean Transition Corp (Announced)
10.48% ~ $ 13.70 | CLII - Climate Change Crisis Real Impact I Acquisition Corp (Announced)
9.24% ~ $ 14.89 | CMLF - CM Life Sciences Inc (Announced)
8.64% ~ $ 11.19 | HSAQ - Health Sciences Acquisitions Corporation 2 (Pre-Deal)
7.56% ~ $ 9.96 | CGRO - Collective Growth Corp (Announced)
6.99% ~ $ 19.58 | TPGY - TPG Pace Beneficial Finance Corp (Announced)
5.30% ~ $ 11.12 | STIC - Northern Star Acquisition Corp (Announced)
5.22% ~ $ 13.70 | GHVI - Gores Holdings VI Inc (Announced)
4.91% ~ $ 11.12 | BCTG - BCTG Acquisition Corp. (Pre-Deal)
4.78% ~ $ 10.95 | SNPR - Tortoise Acquisition Corp II (Announced)

Biggest daily LOSSES

-3.76% ~ $ 11.79 | HOL - Holicity Inc (Announced)
-3.70% ~ $ 26.58 | STPK - Star Peak Energy Transition Corp (Announced)
-3.50% ~ $ 11.59 | AONE - one (Announced)
-3.27% ~ $ 12.12 | DFHT - Deerfield Healthcare Technology Acquisitions Corp. (Announced)
-2.95% ~ $ 9.55 | RPLA - Replay Acquisition Corp. (Announced)
-2.56% ~ $ 10.29 | EXPC - Experience Investment Corp (Announced)
-2.51% ~ $ 16.31 | NGA - NORTHERN GN ACQ (Announced)
-2.29% ~ $ 13.23 | SRAC - Stable Road Acquisition Corp. (Announced)
-2.21% ~ $ 35.42 | BRPA - Big Rock Partners Acquisition Corp (Announced)
-1.90% ~ $ 10.83 | AHAC - Alpha Healthcare Acquisition Corp (Announced)