The bubble of special acquisition companies (SPACs) is continuing and is starting to see more popularity with European and Israeli tech companies
eeNews Europe has identified 9 technology SPACs in Europe and Israel in the first half of 2021, compared to 24 in North America and one in Australia. However some of these such as Rockley Photonics have European founders, and others such as Solid Power have strong European investors such as BMW.
While such companies can list on the London Stock Exchange, regulators are looking at ways to loosen the requirements. In the meantime the vast majority of SPAC deals see a listing on the NASDAQ exchange in the US, as well as the New York Stock Exchange.
The SPAC companies raises money from investors to acquire companies, releasing cash for significant expansion. Deals typically value the combined company at over $1bn and release around $300m to $400m. This is key for electric vehicle and aircraft makers as well as those companies developing networks of chargers and those launching satellites and space systems.
While the operational headquarters of the target companies remains the same, the combined company is often based is tax havens such as the Cayman Islands or the US. This may well be an increasing issue for investing companies based and regulated in Europe.
Tech is actually a small part of the boom. 298 SPACs had an initial public offering in 2021 so far, raising more than $97bn, exceeding the total for 2020. Many of the companies that went public last year are trading under their initial value, but these are all in the early stages of development which is less usual for the stock market.
European technology SPAC deals
EV charging networks
Acquirer: Climate Change Crisis Real Impact I Acquisition Corp.
Valuation: $2.6 billion
Other Investors: Vision Ridge Capital Partners
Connected car data
Acquirer: Software Acquisition Group Inc. II
Valuation: $1.4 billion
Some Investors: Bessemer Venture Partners, SK Holdings
Acquirer: Qell Acquisition Corp
Valuation: $3.3 bn
Some Investors: Tencent Holdings, Freigeist Capital
Connected car data
Acquirer: Virtuoso Acquisition Corp.
Some Investors: General Motors
Vertical Aerospace, UK
Acquirer: Broadstone Acquisition Corp.
Some Investors: Honeywell
Acquirer: PTK Acquisition
Deal value $1.1bn
Other investors: Mediatek
Post quantum encryption
Acquirer: Centricus Acquisition Corp
Deal value : $1.4bn
Other investors: Virgin Orbit
GaN power chips
Acquirer Live Oak II SPAC Business Combination
Deal value $1.04bn
Acquirer : Kensington Capital Acquisition Corp. II.
Deal value $1.5bn
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