The current era is the best for SPACs. Special purpose acquisition companies (SPACs) continue to pop up in SEC filings left, right, and center. And there is no end in sight to their momentum.
Global blank-check deal volumes have jumped to a record $170 billion this year, already surpassing last year’s total of $157 billion. These “blank check” shell companies are quickly emerging as a popular alternative to the traditional initial public offering (IPO) because of less regulatory pressure.
In the first quarter alone, SPACs raised nearly $88 billion from the debut of 298 SPACs, more than doubling from the 132 SPACs and $39 billion in the fourth quarter of 2020.
However, the listing of SPACs is just one part of the overall puzzle. As soon as these investment vehicles go public, they start looking for a merger target. As a result, investors will want to get in on the action early to ensure they take advantage of the sharp price increase after a deal is formalized.
SPACs have two years to complete an acquisition, or they must return their funds to investors.
This list contains seven SPACs that are still looking for a dance partner. In addition, there is a bit of background regarding their sponsors and where they could be headed next.
- Accelerate Acquisition (NYSE:AAQC.UN)
- Bridgetown Holdings (NASDAQ:BTWN)
- Horizon Acquisition II (NYSE:HZON)
- Kingswood Acquisition (NYSE:KWAC)
- Seven Oaks Acquisition (NASDAQ:SVOK)
- Social Capital Hedosophia Holdings Corp. IV (NYSE:IPOD)
- 7GC & Holdings (NASDAQ:VII)
SPACs Looking for a Merger Target: Accelerate Acquisition (AAQC.UN)
Our first entry on this list is Accelerate Acquisition, headed by Robert Nardelli, Michael Simoff, and Jeffrey Kaplan. Debuting on March 18, the investment vehicle was able to raise gross proceeds of $400 million.
It should come as no surprise, considering the executive team heading this one.
In addition, Jeffrey Kaplan has served as the head of M&A at Bank of America’s Bank of America (NYSE:BAC) Merrill Lynch, bringing considerable deal-making experience to this enterprise.
This SPAC is focused on the industrial sector rather than disruptive software companies or electric vehicle (EV) startups — usually the bread and butter for SPACs.
In the company’s own words, “We intend to focus our search on the industrial, transportation & mobility, consumer and retail sectors, where our management team can capitalize on its decades of strategic experience to identify, acquire and operate an attractive target and drive superior shareholder value creation.”
SPACs: Bridgetown Holdings (BTWN)
Peter Thiel heads this one. A billionaire entrepreneur and venture capitalist, Thiel is one of the most controversial figures on Wall Street. However, no one can doubt his track record.
On this particular venture, he is partnering with Richard Li of Pacific Century Group. Bridgetown is headquartered in Hong Kong, and is searching Asian markets for merger targets.
Last year rumors swirled regarding a potential tie-up between Indonesia e-commerce giant Tokopedia. Unfortunately, or fortunately, Tokopedia eventually merged with local ride-hailing giant Gojek in a merger deal worth $40 billion.
However, Bloomberg came out with a report recently that the SPAC was in advanced talks to take Southeast Asia’s answer to Expedia (NASDAQ:EXPE), Indonesia’s Traveloka, public, in a deal that could value the entity at about $5 billion.
SPACs: Horizon Acquisition II (HZON)
Our next entry is reportedly in talks to merge with sports betting play, Sportradar. If you followed the blockbuster debut of DraftKings (NASDAQ:DKNG), you know the stock has skyrocketed since debuting in April 2020. Hence, you can understand why investors are so excited regarding the prospects of this merger.
Nothing is set in stone, though. The latest news is that the two parties have agreed to extend a window to work out an acquisition agreement.
Sports betting makes the most sense since the SPAC’s founder, Todd Boehly, also happens to be a co-owner of the Los Angeles Dodgers.
Kingswood Acquisition (KWAC)
This blank check company debuted on Nov. 24 and managed to raise $115 million. It has an executive team that has personnel from the financial and investment world.
Rumors are flying the blank check shell corporation is looking to combine with Blackstone (NYSE:BX)-backed Lombard International. The potential target is one of the largest independent, global wealth solutions providers in the United Kingdom.
Considering the SPAC’s sponsors include Pollen Street Capital and KPI, both U.K.-based financial institutions, a deal between the two entities seems more likely.
For a lot of investors, the SPAC space is synonymous with EVs and tech-focused startups. However, old money guiding this endeavor can help ease the tension for those still skeptical of putting their hard-earned capital into these vehicles.
Seven Oaks Acquisition (SVOK)
Our next entry proves that there is something for everyone in the SPAC space. Seven Oaks Acquisition focuses on businesses with good environmental, social and governance (ESG) practices. ESG is not necessarily the first thing that comes to your mind when you think about SPACs.
However, one has to acknowledge that EGG investing is not a fly-by-night operation. According to a Bloomberg report, the $2.2 trillion ESG debt market could increase to $11 trillion by 2025.
Coming back to the SPAC in question, Seven Oaks is led by CEO and Chairman Gary Matthews, who previously served as CEO of IES Holdings (NASDAQ:IESC). Meanwhile, CFO Andrew Pearson founded Soundview Advisors in 2019 after a two-decade stint with General Atlantic.
Although there is nothing concrete yet, Boxed, an online retailer of products in bulk, is said to be negotiating with the SPAC regarding a possible merger that could value the combined company at more than $1 billion.
Social Capital Hedosophia Holdings IV (IPOD)
SPAC sponsor Chamath Palihapitiya has become iconic in the space. As I write this article, he has several SPACs on the hunt for merger targets.
IPOD and sister concern Social Capital Hedosophia Holdings VI (NYSE:IPOF) is awaiting a merger confirmation. Unfortunately, time is not on their side. But Chamath’s reputation precedes him. Hence, investors are willing to gamble when it’s his name on the ticket.
InvestorPlace has excellent coverage of his latest moves. So, keep updated with the news stream when it comes to this one. However, as I touched upon earlier, this is an entrepreneur that brought Virgin Galactic (NYSE:SPCE), Opendoor (NASDAQ:OPEN), and Clover Health (NASDAQ:CLOV) public.
So, Chamath brings significant firepower to the table with his offerings.
7GC & Co. Holdings (VII)
7GC & Co. Holdings are typical of the SPACs out there. Hennessy Capital Investment, a SPAC specialist, is backing this one. It has already brought five blank check entities to the promised land.
Its leadership team consists of staff from Uber (NYSE:UBER), which makes me think it will target disruptive companies.
In March, there were rumors that it could be looking to bring Vice Media public. However, as is the case with several names on this list, this is not a done deal.
On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.