SPAC IPO DEAL COUNT AND GROSS PROCEEDS

After a banner year in 2017 for SPACs with 34 total deals raising a little over $10 billion, everyone is naturally curious to see if we’ll have a repeat in 2018.  Can the popularity of SPACs hold up?  We ran some numbers to see if we can read the tea leaves…

2017:  SPAC IPOs vs. Non-SPAC IPOs

2017 saw 160 total IPOs price, 34 of which were SPACs, or 21.3% of the total 2017 IPO universe.  However, if you remember, Q1 of 2017 was the second slowest quarter in the past seven years in terms of IPO activity.  Nevertheless, SPACs still accounted for 20% of all IPOs in Q1.

2018 YTD:  SPAC IPOs vs. Non-SPAC IPOs

Looking at 2018 year-to-date, so far there have been 79 IPOs priced, of which 16 have been SPACs, or 20.3% of the total 2018 YTD universe.  This is similar to 2017 (21.3% vs. 20.3%).

Additionally, if we just look at Q1 – 2017 vs. 2018, the total number of IPOs nearly doubled (25 for 2017 vs. 44 for 2018) and yet SPACs kept up.  SPACs accounted for 25% of total deal volume in Q1 2018 (11 of 44 total).

Now let’s just look at SPAC alone.

SPACs 2017 vs. SPACs 2018 YTD

Looking at the chart above, we can see that the majority of SPAC IPOs in 2017 occurred from June onward.  24 SPAC IPOs of the total 34 in 2017 priced from June through December.  We’re not through the month of June yet, but as of right now we have one IPO priced (GS Acquisition), Far Point will price tonight, and Thunder Bridge “should” price before the end of the month.  On top of that, we have ANOTHER seven SPACs on file to IPO and we’re not even halfway through the year.

IPO Proceeds:  SPACs vs. Non-SPACs, 2017 & 2018 YTD

Looking at Gross Proceeds, you’ll notice that 2018 slightly lags 2017, but not by much.  Remember, two-thirds of 2017s SPACs were completed from June through December.  However, average IPO size is slightly down in 2018 YTD.  Currently, 2018 SPACs are averaging $245.8 million average IPO size vs. the Full Year 2017 average of $295.5 million.  Yet, 2018 just saw the $600 million GS Acquisition price, Far Point will be $500 million and we haven’t even factored in over-allotments for those two yet, so the end of June could see a very different average IPO size for 2018.

In conclusion, so far 2018 has slightly exceeded 2017 in deal count and I expect that trend to continue.  The real wild card here are the “serial SPAC Issuers”.  If you follow SPACs closely, you know there are a number of SPACs that have management teams on their second, third or even sixth SPAC! (like Allegro Merger Corp.) and there are a number of prior SPACs, like Silver Run I & II, that I would bet file for another before the end of this year.

Additionally, as we work our way through the current 49 SPACs seeking a target, you can bet many of them will file for another once they complete their business combinations.  All told, I’m going to go out on a limb and predict total SPAC IPO deal count for 2018 will be in the range of 45-50.

It’s going to be a very, very busy second half of the year.