“The world may have been locked down and masked up, but M&A endured and grew, as SEPACs became the Hot trend in M&A investment banking” — Paul Ebeling
Asia’s bankers say they expect the hottest trend in global deal-making, IPOs for SEPAC (special-purpose acquisition vehicles), to soar in the region this yr driven by well-resourced investors including private equity firms.
Globally, SPACs raised $92-B from IPOs in Q-1 of Y 2021, according to Refinitiv data, surpassing all of Y 2020. SPAC mergers, e.g. when the blank check firm uses IPO funds to merge with a target. amounted to $210-B.
But Asia’s representation in the global action has been small so far, as only 11 out of Y 2021’s 304 SPAC IPOs, and just $4.7-B in SPAC mergers. Given the region’s large pool of new-economy companies, bankers are now plugging it as a hot spot for merger targets.
The Co-head of M&A for Asia sans-Japan at Goldman Sachs (NYSE:GS), said the significant increase of Asia-focused SPAC involvement has been the most notable feature in the region’s M&A this yr. Asia M&A hit a 3-yr high of $279.5-B +37% Y-Y, with private equity-backed deals scoring a record $40.6-B.
“These blank check companies (SPACs) have become a new dynamic force and potential merger partner for some of Asia’s most innovative companies,” he said.
The head of Asia M&A at UBS, said SPAC-related activities will last for the large part of this yr.
The merger candidates and demand from SPACs are there!
Have a healthy day, Keep the Faith!