DealLawyers.com Blog

This Venable alert says SPACs have been back, especially since the “inflection point” in the second half of 2024, in which 57 SPAC IPOs raised approximately $9.6 billion. It says, “the renewed activity reflects increased investor confidence and a more orderly market environment.” That means that “SPAC market 2.0” differs from its predecessor in that it’s a little less wild wild west, to the extent you felt that way about the prior SPAC boom.

The SPAC market’s revival reflects broader improvements in both market conditions and the regulatory framework. Equity valuations have stabilized, traditional IPO windows have reopened, and the SEC Rules have provided long-awaited clarity on disclosures, liability, and sponsor compensation.

These developments have made SPACs more transparent, predictable, and investor friendly. Sponsors with strong track records are once again launching new vehicles, and institutional investors are returning. Recent transactions feature improved alignment between sponsors and investors and more disciplined deal structures.

Investors are focusing on experienced sponsors with credible track records and clearly defined strategies, while target companies are increasingly mature private companies seeking efficient access to public capital.

With enhanced regulatory certainty and a more measured approach to dealmaking, SPACs have reestablished themselves as a viable alternative to traditional IPOs for private companies seeking efficient access to public capital.

We’re here for it!

– Meredith Ervine