Less than three months after its New York Stock Exchange debut, the shares of blank-check firm ION Acquisition (NYSE:IACA) have surged on reports that the firm is in talks to acquire digital advertising firm Taboola. IACA stock was up as much as 20% in pre-market trading.
IACA stock’s October initial public offering raised $225 million for the special purpose acquisition company (SPAC) focusing on the Middle East region. Its stated goal was a merger with a private company valued at more than $1 billion. That IPO was upsized by more than 10% to 22.5 million units ahead of the floatation. Both ION and Taboola are based in Israel.
Daily Haaretz reported on Monday that Taboola was mulling either a SPAC merger or its own IPO. Its sister publication, business daily TheMarker, on Tuesday reported the ION-Taboola negotiations.
Taboola came close to a merger with rival Outbrain earlier this year, before more than 12 months of negotiations broke down over revisions to the deal’s terms. The tie-up would have given the combined firms the ability to reach 2 billion people a month and pose a significant threat to the digital advertising dominance of Facebook (NASDAQ:FB) and Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google.
IACA Stock IPO’d in October
With its debut in October, ION Acquisition joined a growing roster of financiers raising hundreds of millions of dollars in search for a place to put it. In most cases, SPACs have two years to make their move, though most have little trouble finding an investment.
At the time, ION Chief Executive Gilad Shany told Reuters he wanted to target Israeli tech companies at over $1 billion valuation and bridge the gap between local entrepreneurs and the U.S. capital market. Shany is no stranger to the IPO world. Two of his previous investments, Fiverr International (NYSE:FVRR) and telemedicine firm American Well (NYSE:AMWL), went public in New York.
According to the firm’s SEC filings, other executives include President and COO Avrom Gilbert, previously in the same roles with financial website Seeking Alpha.
More SPACs Ahead
While IACA is probably the only SPAC focused on the Middle East, it follows other narrow-geographic blank-check companies like Bridgetown Holdings (NASDAQ:BTWN), backed by billionaires Peter Thiel and Richard Li. Bridgetown is on the prowl for for technology, finances and media companies in Southeast Asia. Reports broke earlier this month that BTWN is in discussions with Tokopedia.
While many SPACs have gone public in 2020 and found success, there are still a bunch with significant potential that have yet to pop. Others are still in the search phase and are actively seeking a target firm with which to partner.
What should investors look for?
Just last week, InvestorPlace contributor Alex Sirois highlighted a handful of 2020 SPACs that could make you more money, each possessing all the hallmarks of a solid blank-check pick. His list includes: CIIG Merger (NASDAQ:CIIC), Social Capital Hedosophia Holdings II (NYSE:IPOB) and Pershing Square Tontine Holdings (NYSE:PSTH).
On the date of publication, Robert Lakin held a long position in IACA.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.