Market Standards: Trends in De-SPAC Terminations

Now that the special purpose acquisition company (SPAC) boom has subsided, more than 500 SPACs are actively seeking private acquisition targets for de-SPAC transactions before the expiration of business combination deadlines. At the same time, supply chain issues, inflation, acts of war and political conflict, heightened regulatory scrutiny, and increased SPAC litigation have all impacted SPAC market conditions. The number of terminations of announced de-SPAC transactions indicates that the SPAC market is reactive to the changes and uncertainties in market conditions.  

According to Market Standards, out of 219 de-SPAC transactions announced between January 1, 2021 and September 30, 2022:

• 29 deals (13%) have been terminated,
• 105 deals (48%) are still pending, and
• 85 deals (39%) were completed

Of the 29 terminated deals, nearly half of those were terminated in Q1 2022 due to market conditions, and it is anticipated that many of the 105 pending deals will reach their outside date or be terminated by mutual agreement due to market conditions (see these transactions in in Market Standards). Note: Market Standards is continuously updated. As a result, deal numbers may have changed since the publication of this newsletter.

Market Standards is a powerful tool for researching and comparing over 38,000 M&A transactions from 2008 to the present. Leverage Market Standards to find on-point precedent language on the most highly-negotiated transactions with over 150+ M&A deal points. To learn more about how it can help M&A attorneys work more efficiently, click here.

Discover Emerging Trends in M&A Transactions          

Take a closer look at de-SPAC transaction terminations in the latest Market Trends practice note.

Read now »

Related Content

• Special Purpose Acquisition Companies
  Refresh your knowledge of SPACs, including the SPAC IPO process, blank-check company status, restrictions and limitations, and the initial business combination.

• Market Trends 2021: De-SPAC Transactions
  Check out certain trends among de-SPAC transactions in 2021, including trends related to private investment in public equity (PIPE) financings, sponsor lock-ups, redemptions, earnouts, and heightened regulatory scrutiny.

• Inflation Reduction Act's Potential Impact on M&A Transactions
  Learn how certain tax provisions in the Inflation Reduction Act could affect the way M&A transactions are structured.

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