SPAC Forecast & Upcoming IPOs ☔ 💵

Psst..Check out our review of the week's upcoming SPAC & IPO deals, just a scroll away.

Merger and acquisition deals have already blown through records this year, exceeding $2.4TN, a 158% increase over 2020. After a sluggish April for SPAC deals, due to fear of greater regulation and less-than-impressive post-deal stock performances, SPACs made up 11% of M&A deals in May. For everyone bouncing among articles professing to predict the future, it’s useful to look at one component to SPACs that offers some foresights into the future.

    

Courtesy Illustration: Hermann Mueller/Getty Images

The 24-month rule

A piece of the genetic code of Special Purpose Acquisition Companies is their 2-year mandated period invest at least 80% of proceeds on an acquisition; otherwise, 100% of the money will be returned to investors. With a goal of ensuring timely returns on investor money, this rule inadvertently does a couple of things: negatively, some argue, these timelines put pressure on a quick deal, rather than a good one. As seen on the CNBC SPAC Post-Deal Index, SPAC deals have stalled in gains, potentially making them less attractive to private companies looking to exit.

The Silver Lining for Private Companies

The second aftereffect of the 2-year deadline is the greater possibility for private companies to score a better deal when blank-check investors are feeling the pressure to purchase at the end of two years. These deadlines create a veritable crystal ball towards upcoming SPAC booms. According to Bloomberg data, 31 expiration dates are slated for October 2022, equivalent to roughly $10.2BN. The following year, in March of 2022, we will see 106 SPACs expiring (2 years after March's SPAC frenzy), with $34.5BN in acquisition funds raised.

Major SPAC Mergers from May:

🌰 Acorns: The spare change investment company
Acquirer: Pioneer Merger Corp.
Valuation: $2.2 BN

🚚 Tritium: Outsourcer of IT services
Acquirer: Decarbonization Plus Acquisition Corp II 
Valuation: $1.2 BN

👾 Jam City: Mobile app gaming company
Acquirer: DPCM Capital
Valuation: $1.1 billion

🔬 Ginkgo Bioworks: Genetic engineers of good bacteria
Acquirer: Soaring Eagle Acquisition Corp.
Valuation: $17.5 billion

👩‍🔬 Benson Hill: Machine learning meets genome editing
Acquirer: Star Peak Corp. II
Valuation: $2 billion

This Week’s SPAC and IPOs

💳 Katapult: No credit required financing 
SPAC: June 7 - KPLT & KPLTW
Acquirer: FinServ Acquisition Corp - FRSV

👶  23andMe: Gene testing for long lost relatives and health predispositions
SPAC: June 9 -  ME
Acquirer: VG Acquisition Corp. - VGAC

📱 TaskUs: Offers digital outsourcing of hiring, sales, customer service, tech support & more 
IPO: June 11-TASK
Expected Valuation: $2.3BN
Expected Share Price: $22-24

💎 1stDibs: Luxury online marketplace
IPO: June 10 - DIBS
Expected Valuation: $773MM
Expected Share Price: $18-21

📋 Monday.com: Israel based workflow management company
IPO: June 10 - MNDY
Expected Valuation: $6.12BN
Expected Share Price: $125-140