We're pleased to announce Freshfields' 2022 De-SPAC Debrief: A comprehensive review of all 102 de-SPAC transactions that closed in 2022. 2022, a challenging year for SPACs, was also the 2nd biggest year ever for SPAC M&A.
We reviewed all 102 de-SPAC business combinations closed during 2022, and have compiled a statistical summary of these deals. SEC rule proposals had a chilling effect on the market, PIPE financing became harder to raise, the stock prices of de-SPACed companies fell, and shareholder redemptions were high. Nevertheless, 102 de-SPAC business combinations closed during 2022, which was the 2nd most de-SPACs ever during one year (second to 2021). The entirety of the report - including all 64 terms we analyzed - can be found here, and we have summarized our key takeaways below:
More fairness opinions
32% of the closed deals had fairness opinions during 2022, compared to 15% in 2021.
Significantly higher redemptions
Redemption levels for closed deals during 2022 were over 80% on average during 2022 compared to an average of approximately 40% for closed deals during 2021.
Longer time from the SPAC’s IPO to signing the de-SPAC
The time between the SPAC’s IPO and signing the de-SPAC BCA was on average 10 months during 2022 for closed deals, compared to an average of 7.4 months during 2021.
Longer time from signing to close
The time between signing the BCA and closing was on average more than 7 months during 2022 for closed deals (almost 8 months in the second half of 2022), compared to 5 months during 2021 and 4.4 months during 2020.
Longer time to clear the SEC
The average closed deal spent 4.5 months in front of the SEC during 2022, compared to 3.3 months in 2021 and 2.7 months during 2020.
Sellers received less consideration on average
Sellers received approximately $1.7 billion of merger consideration on average in the 2022 closed deals, compared to $2.2 billion on average in the 2021 closed deals.
Sellers received cash consideration less frequently
87% of the 2022 closed deals provided sellers with all stock consideration (2021: 64%) and only 13% provided mixed stock/cash consideration (2021: 35%).
PIPE financing was less ubiquitous
70% of the closed deals in 2022 were accompanied by PIPE financing, compared to 95% of the closed deals in 2021.
PIPE financings were smaller
The average PIPE financing in the 2022 closed deals was approximately $128 million (and only $93 million in the fourth quarter of 2022), compared to $316 million for the 2021 closed deals.
The average PIPE financing in the 2022 closed deals was less than 50% of the size of the SPAC’s trust account on average in the 2022 deals, while the average PIPE financing in the 2021 closed deals was nearly 100% of the SPAC’s trust account on average in the 2021 deals.
Greater percentage of deals amended prior to closing
60% of the 2022 closed deals were amended between signing and closing, compared to 37% of the 2021 closed deals.
Everyone interested in SPACs—bankers, investors, company executives, private equity professionals, accountants, lawyers, communications and PR professionals—will find something of interest in the statistical data. For more information on SPACs, please contact any of the authors or your usual Freshfields contact. We look forward to 2023!