- Going Shopping: Investors are still flush with capital, even after 2021 which was a banner year for the deployment of Special Purpose Acquisition Companies (SPACs). We expect to see a record number of business combinations as investors look for targets that can show growth and are willing to price themselves at valuations that can leave upside for all participants. Don’t be surprised to see high-quality repeat SPAC sponsors make a second and third trip to the market to raise most of the new SPACs, a trend we started to see in 2021.
- Cross Border: SPACs will continue to be a viable alternative to the traditional IPO for established companies in Latin America and Europe seeking to access the capital markets. Recent SPAC deals including Betterware, Procaps and Codere Online have set the course. That means SPACs with cash to invest will continue to circle the Latin American and European markets looking for merger targets that could benefit from the cash influx that comes with a SPAC deal, which can help fuel a company’s continued development.
- DeSpac to Fund an Acquisition: Expect to see more target companies approach a SPAC as a vehicle to raise capital to fund a bolt on acquisition.
- Environmental, Social and Governance (ESG) Conscious: Expect to see SPAC sponsors increasingly focused on diversity and inclusion when it comes to the makeup of target company management and boards.
- Looking Green: Hot sectors for target companies will continue to focus on all facets of the rapidly developing electric vehicle industry and other green technologies.
About the Author
Alan I. Annex is co-chair of the firm's Global Corporate Practice. He leads multi-disciplinary deal teams in a wide variety of large-cap and middle-market domestic and cross-border transactions. Alan has broad experience in corporate and securities matters, and regularly advises public company boards, special committees and executive management regarding their fiduciary duties; corporate governance best practices; and M&A deal strategies, structures and techniques.