US SPACs Data Hub

While deal count grew, US de-SPAC business combination deal value decreased over the first half of 2023. Announced de-SPAC deal value totaled US$17.21 billion in H1 2023, 20 percent down from the US$21.58 billion posted for H1 2022

De-SPAC business combination deal count has shown year-on-year gains, climbing from 39 business combinations in H1 2022 to 64 transactions in H1 2023

Even though de-SPAC deal value has declined year-on-year, business combination activity has held up relatively well when compared to wider M&A markets, with global deal value falling 45 percent from US$2.2 trillion in H1 2022 to US$1.3 trillion in H1 2023, according to Bloomberg¹

SPAC sponsors have remained on the lookout for investment opportunities as investment periods come to an end, and some sponsors have secured extensions to investment periods, lengthening the runway for deal flow

On a quarter-by-quarter basis, Q2 2023 de-SPAC deal value and volumes are down compared to Q1 2023, with value falling from US$9.3 billion in Q1 2023 to US$7.9 billion in Q2 2023, and deal count decreasing from 38 business combinations to 26

Business combination volumes are still lower than the levels seen in H1 2021, when deal count reached 130 business combinations, but compare favorably to pre-pandemic activity levels, with only seven business combinations recorded in the first half of 2019

Healthcare, technology, energy and power and industrials were the busiest sectors by deal count

A key driver of de-SPAC activity across all sectors has been AI, with SPAC sponsors showing strong appetite for businesses that are developing and using AI tools to improve service delivery and drive efficiency

_{1 https://news.bloomberglaw.com/bloomberg-law-analysis/analysis-h1-2023-m-a-activity-was-as-bad-as-it-seemed}

Muted IPO markets have taken a toll on new SPAC listings over the first half of 2023

Even though the S&P 500 has rallied in 2023, showing gains of approximately 15 percent since the start of the year², the backdrop for IPOs globally has been challenging, with inflation risk and high interest rates a concern for cautious investors. Global IPO activity in 2023 dropped to the lowest levels observed since COVID-19 first impacted markets in 2020³, with larger ticket listings concentrated on non-US exchanges

Only 16 SPAC IPOs on US exchanges were completed in H1 2023, down from the 68 listings in H1 2022

Year-on-year proceeds have decreased from US$11.79 billion in H1 2022 to only US$1.82 billion in H1 2023

On a quarter-by-quarter basis, deal activity also declined. There were only six SPAC listings in Q2 2023, down from ten in Q1 2023

Proceeds, however, have edged higher, rising from US$821.75 million in Q1 2023 to just over a US$1 billion in Q2 2023

SPAC IPO levels in Q2 2023 are also significantly below the quarterly peak of US$93.06 billion of proceeds secured from 297 SPAC IPOs landed in Q1 2021

Nasdaq has attracted the bulk of SPAC listings that have proceeded this year

The NYSE only secured two SPAC listings in H1 2023, with Nasdaq securing 14 SPAC IPOs over the period

The annual record of 432 SPAC IPOs on Nasdaq and 180 on the NYSE in 2021 already seems like a distant memory, and even the more modest 72 Nasdaq SPAC IPOs, and 12 NYSE SPAC IPOs posted in 2022 will now be difficult to match

_{2 https://www.marketwatch.com/investing/index/spx. As of July 10, 2023
3 https://www.whitecase.com/insight-our-thinking/global-ipos-markets-pause-take-breath}

Healthcare

Largest announced de-SPAC deals:

• Semper Paratus Acquisition Corp. announced its business combination with Tevogen Bio in a US$1.41 billion deal
• Syntec Optics agreed to a US$611.72 million business combination with OmniLit Acquisition Corp.

Healthcare was the largest de-SPAC sector by value and volume over the first half of 2023, with 19 business combination deals worth US$4.61 billion announced.

Even though investment in early-stage drug discovery and biotech companies slowed through the course of 2022 and into 2023⁴, and the Dow Jones US Health Care Index has traded in the red so far this year⁵, the long-term fundamentals underpinning the sector, including an aging population, higher rates of chronic disease and sustained medical innovation, have continued to support a positive long-term growth outlook as well as downside protection for investors.

Semper Paratus Acquisition Corp. announced a US$1.41 billion business combination with Tevogen Bio, the largest healthcare de-SPAC of the year so far. Tevogen specializes in the development of T-cell therapies and sees the business combination as a tool to speed up development of its Covid therapy TVGN 489⁶.

Syntec Optics, an optics and photonics business, agreed to a US$611.72 million business combination with OmniLit Acquisition Corp.⁷, the second-largest healthcare de-SPAC this year so far.

_{4 https://www.economist.com/business/2022/08/10/after-a-covid-fuelled-adrenaline-rush-biotech-is-crashing
5 https://www.marketwatch.com/investing/index/djushc?countrycode=xx. As of July 10, 2023
6 https://www.reuters.com/markets/deals/biotech-firm-tevogen-bio-enters-12-bln-spac-deal-us-listing-2023-06-29/
7 https://seekingalpha.com/news/3970271-spac-omnilit-to-merge-withphotonics-maker-syntec-optics}

Technology

Top-three largest announced de-SPAC deals:

• iLearningEngines announced a US$1.28 billion business combination with Arrowroot Acquisition Corp.
• Allurion Technologies announced a business combination worth US$481 million with Compute Health Acquisition Corp.
• BYTE Acquisition Corp. announced a US$301.13 million business combination with Airship AI Holdings

Momentum from the rally in technology stocks carried over into the SPAC space, spurring strong business combination activity through the first half of 2023.

The Dow Jones US Technology Index has gained more than 40 percent over the first half of 2023⁸, helping to drive up business combination deal flow in the sector after a sluggish start to 2023. This has ranked technology as the second most active industry for de-SPAC deals by volume and value, with 11 deals worth US$3.03 billion.

The biggest technology de-SPAC recorded in H1 2023 saw training software company iLearningEngines announce a US$1.28 billion business combination with Arrowroot Acquisition Corp.

The business combination will provide approximately US$140 million of capital for iLearningEngines, some of which will help to finance acquisitions, according to Reuters. Led by chief executive Harish Chidambaran, iLearningEngines is focused on developing personalized training that harnesses AI-driven automation tools and software⁹.

The US$481 million business combination between Allurion Technologies and Compute Health Acquisition Corp. ranked as the second-largest de-SPAC in the sector. Allurion develops AI-powered applications that support remote patient monitoring and therapeutics, with weight loss being the core focus area of the technology¹⁰.

BYTE Acquisition Corp.'s announced US$301.13 million business combination with Airship AI Holdings was also driven by the momentum in the artificial intelligence space. The company provides AI-driven edge video, sensor and data management platforms¹¹.

_{8 https://www.marketwatch.com/investing/index/djustc?countrycode=xx. As at July 5, 2023
9 https://www.reuters.com/markets/deals/training-software-firm-ilearningengines-go-public-via-14-bln-spac-deal-2023-04-27/
10 https://www.bariatricnews.net/post/allurion-links-up-with-compute-healthacquisition-to-become-publicly-listed-company
11 https://www.securityinfowatch.com/video-surveillance/video-managementsoftware-vms/press-release/53065257/airship-ai-to-list-on-nasdaq-throughbusiness-combination-with-byte}

Energy and power

Top-three largest announced de-SPAC deals:

• Honeycomb Battery Co. announced a US$954.6 million business combination with Nubia Brand International Corp.
• Montana Technologies announced a US$618.14 million business combination with Power & Digital Infrastructure Acquisition II Corp.
• Sunergy Renewables agreed to a US$410 million business combination with ESGEN Acquisition Corp.

Energy and power was the third-largest sector for de- SPAC deal volume and fourth- largest by deal value, with eight business combinations worth US$2.55 billion.

The sector saw increased interest from SPAC sponsors, with deal count for H1 2023 already matching the fullyear total of eight deals for 2022.

The sector has benefited from generous green energy subsidies and a surge in investment in clean energy (according to consultancy Oliver Wyman, global annual venture capital investment in clean energy has increased more than six-fold from pre-pandemic levels¹²), as well as a rally in hydrocarbon energy prices with oil prices now four-times higher than the lows reached during 2020 lockdowns¹³.

The focus on clean energy underpinned the largest de-SPAC transaction in the sector in H1 2023, as Nubia Brand International Corp. agreed to a US$954.6 million business combination with Honeycomb Battery Co., a developer of batteries for electric vehicles¹⁴.

In the second-largest de-SPAC in the sector, Montana Technologies and Power & Digital Infrastructure Acquisition II Corp. announced a US$618.14 million business combination. Montana Technologies develops renewable energy and cooling technologies¹⁵.

Another clean energy asset delivered the third-largest de-SPAC deal in the sector with Sunergy Renewables, a provider of solar and battery power, as well as residential energy storage, agreeing to a US$410 million business combination with ESGEN Acquisition Corp.

In the oil & gas space, Roc Energy Acquisition Corp. and Drilling Tools International, an oilfield services company, completed a US$209.27 million business combination.

_{12 https://www.reuters.com/sustainability/venture-capital-investment-cleanenergy-startups-soars-2023-05-18/
13 https://www.bbc.co.uk/news/topics/cmjpj223708t/oil
14 https://www.theglobalgraphenegroup.com/honeycomb-generates-buzz-viaspac-merger/
15 https://news.spacconference.com/2023/06/05/montana-technologies-tocombine-with-power-digital-infrastructure-acquisition-ii-in-500m-deal/}

Industrials

Top-three largest announced de-SPAC deals:

• Kernel Group Holdings agreed to a business combination with AIRO Group Holdings in a US$1.1 billion deal
• Marblegate Acquisition Corp. and DePalma agreed to a US$755 million business combination
• World View Enterprises agreed to a US$350 million business combination with Leo Holdings Corp. II

The industrials sector recorded seven de-SPAC deals worth a combined US$2.85 billion over the first half of 2023, making it the fourth-largest sector for business combination activity by volume and third-largest by value.

Inflation has had a direct impact on the sector, leading to increases in production costs, energy and raw material costs as well as wages, but opportunities have emerged for industrials businesses able to decarbonize manufacturing processes and take advantage of automation and data analytics to reduce overheads.

In the largest industrials de-SPAC deal of the year so far, Kernel Group Holdings and AIRO Group Holdings, an aerospace and defense company, announced a US$1.1 billion business combination. AIRO plans to use proceeds to develop its drone, AI and air taxi projects¹⁶.

In the second-largest industrials de-SPAC deal of the year, Marblegate Acquisition Corp. and DePalma, a company holding taxi operation licenses in New York, Philadelphia and Chicago¹⁷, announced a US$755 million business combination.

The US$350 million business combination of Leo Holdings Corp. II and World View Enterprises, a stratospheric flight and exploration business¹⁸, ranked third.

_{16 https://www.flyingmag.com/kernel-group-holdings-to-merge-with-evtoldeveloper-airo-group/
17 https://news.spacconference.com/2023/02/22/marblegate-acquisitionmerging-with-depalma-companies-in-755m-deal/
18 https://www.businesswire.com/news/home/20230112005881/en/Stratospheric-Exploration-Leader-World-View-to-Go-Public-via-SPAC-Deal-with-Leo-Holdings-Corp.-II}

Financials

Top-three largest announced de-SPAC deals:

• Vahanna Tech Edge Acquisition I Corp. announced a business combination with Roadzen in a US$965 million deal
• K Enter Holdings announced a US$610 million business combination with Global Star Acquisition Inc.
• Live Oak Mobility Acquisition Corp. and One Americas Holdings announced a US$65 million business combination

Financials ranked as the fifth-largest sector for de-SPAC deal volume and value in H1 2023, with four business combinations valued at US$1.64 billion.

The collapse of banks SVB and Signature Bank and rising interest rates have put the wider financials sector under pressure, dampening the appetite for de-SPAC deals. This is consistent with the S&P 500 Financials Sector Index showing no gains in 2023 so far¹⁹.

The Vahanna Tech Edge Acquisition I Corp. US$1 billion business combination with Roadzen accounted for more than half of the overall de-SPAC deal value in the financial services industry.

Insuretech platform Roadzen is focused on the global driver insurance industry and uses technology to offer discounted premiums and more efficient claims processing. The business has embedded telematics and AI tools into its products and has secured insurance distribution licenses across multiple global markets.

The other notable deals in the sector in H1 2023 included the business combination between K Enter Holdings and Global Star Acquisition Inc., and Live Oak Mobility Acquisition Corp.'s business combination with One Americas Holdings.

_{19 https://www.marketwatch.com/investing/index/sp500.40?countrycode=xx. As of July 10, 2023}