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ICR, the Leading SPAC Communications and Advisory Firm, Publishes Q3 2021 SPAC Market Update

·3-min read

SPAC IPO Issuance Remains at a More Sustainable Level

Post-Closing, Companies are Pivoting to Mitigate Dilution from Warrant Overhang and Access Growth Capital through Convertible Debt Offerings

NEW YORK, October 14, 2021--(BUSINESS WIRE)--ICR, a leading strategic communications and advisory firm, today released its Q3 2021 SPAC Market Update report.

SPAC IPO issuance in the third quarter of 2021 stabilized following Q2 normalization, with 88 SPACs raising more than $16 billion, an increase of 47% and 37%, respectively, when compared to the second quarter of 2021, when 60 SPACs raised $11.7 billion. This strong Q3 SPAC IPO activity resulted in 457 active public SPACs holding more than $112 billion in cash as of September 30, 2021.

"ICR participated in a record number of SPAC transactions in the first three quarters of 2021," said Don Duffy, President of ICR. "SPACs, companies, and their investors are seeking communications advisors that bring capital markets expertise, investor relations, deal communications, and PR to the table, and we are the largest integrated global platform to deliver that. In addition, as the market has gotten more challenging, they are also seeking enhanced plans to mitigate investor redemptions."

In addition, nearly 312 SPACs were on file with the SEC to raise more than $65 billion as of September 30, 2021.

"SPAC IPO issuance today reflects the fact that companies have more options to the public market while the IPO market remains very robust, and we are seeing increased interest in even direct listings for the right businesses," said Lee Stettner, Co-Head of Capital Markets at ICR Capital.

The increase in SPAC redemptions has also impacted post-merger access to capital and shareholder targeting.

"Redemption rates more than doubled in the third quarter, which has reduced share liquidity and increased warrant coverage for many post-merger SPAC companies," said Niren Nazareth, Managing Director, ICR Capital. "We are actively advising deSPAC management teams on strategies to reduce cap table complexity in order to improve access to capital."

In addition, many companies that have completed SPAC transactions now have a public equity that is seasoned enough to consider convertible financing. With convertible market technicals friendly to issuers, a number of these management teams are adding convertible securities to their financing toolkit.

"After five convertible deals by former SPACs in the first half of 2021, Q3 saw a doubling of the pace with six more issuers raising $4.3 billion," said Syed Raj Imteaz, Managing Director and Head of Convertible and Equity Derivatives Advisory, ICR Capital. "All six issuers also used capped calls to increase their effective conversion premium to an average of 103%. ICR Capital advised two of the six issuers this quarter, helping them navigate through the complexities of a convertible transaction and raise attractive capital easily and efficiently. Convertibles have often been a financing tool of choice for high growth companies, and we expect issuances by former SPACs to rise further as issuers appreciate the benefits of convertibles and capped calls."

ICR is the largest advisor and communications consultant to SPACs, having worked on more than 160 transactions over the past decade. To obtain a copy of ICR’s Q3 2021 SPAC Market Update report, please click here.

About ICR

Established in 1998, ICR partners with its clients to execute strategic communications and advisory programs that achieve business goals, build awareness and credibility, and enhance long-term enterprise value. The firm’s highly-differentiated service model, which pairs capital markets veterans with senior communications professionals, brings deep sector knowledge and relationships to more than 750 clients in approximately 20 industries. ICR’s healthcare practice operates under the Westwicke brand (www.westwicke.com). Today, ICR is one of the largest and most experienced independent communications and advisory firms in North America, maintaining offices in New York, Norwalk, Boston, Baltimore, San Francisco and Beijing. Learn more at www.icrinc.com. Follow us on Twitter at @ICRPR.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211014005845/en/

Contacts

Brian Ruby, ICR, 203-682-8268, brian.ruby@icrinc.com

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