DealLawyers.com Blog

According to this Freshfields alert, more than 125 SPACs have gone public in 2026. While the Freshfields team doesn’t expect a return to 2021 levels, they do see privately held companies having a renewed interest in deSPAC transactions. While the alert notes that deSPACs may not appeal to everyone, here are situations when a deSPAC may be of interest:

– Continued Control: In most deSPACs target management continues to run the combined company post-closing. For founder led companies, or companies where the management team is heavily invested in the business, a deSPAC may prove appealing.

– Access to Public Markets: In many ways the principal benefit of a deSPAC is taking the target public and gaining a listing on the NYSE or Nasdaq. Listed companies may attract a broader investor base, aided by the visibility provided by ongoing public reporting and analyst coverage. This, in turn, may lead to new capital raising opportunities. Listed shares also increase the appeal of equity-based compensation for employees and provide currency for acquisitions. In May 2026 the SEC published proposed rules that would facilitate capital raising by, among other things, making shelf registration statements on Forms S-3/F-3 available for certain companies immediately upon completion of their deSPAC transaction.

– Alternative to an IPO: deSPACs may be viewed as an easier, more certain path to going public than an IPO. In an IPO, valuation is arrived at during the roadshow, which occurs at the end of the process, following SEC review of the registration statement. In a deSPAC, in contrast, the parties determine valuation when the business combination agreement is signed, akin to the timing in a traditional M&A transaction. Furthermore, in an IPO (whether the shares sold are newly issued by the company or sold by existing shareholders) the underwriters must identify new investors to buy the offered shares. In a deSPAC, so long as any minimum cash condition is satisfied, the parties eliminate (or substantially reduce) the need to identify new investors.

– Lower Regulatory Risk: In strategic M&A, transaction review by antitrust authorities and other governmental regulators may pose significant execution risk and add substantial cost to the process. Because SPACs are shell companies with no operations, a deSPAC may present lower regulatory risk than a transaction with a strategic buyer.

The alert also says that earlier SPAC cycles have taught us a few things. Now targets tend to be more mature, and they’re more likely to be ready to go public. Freshfields also expects earnouts to be more likely in today’s market due to valuation challenges.

– Meredith Ervine