I recently discussed the popularity of SPACs/de-SPAC transactions in the healthcare sector in an article featured in the Health Care M&A News publication. The rise in these types of transactions can be attributed to the market during and coming out of the COVID-19 pandemic.
Speaking to the attraction of a de-SPAC transaction, I stated “There’s more deal certainty, pricing is discovered sooner, and you have a long-term investment partner in the form of a SPAC sponsor. You effectively do the roadshow before the transaction is announced.”
I went on to add that I believe SPACs will remain a popular option for the foreseeable future. “There’s a lot of liquidity in the market and investors want to do something with it. The SPAC transaction isn’t going away anytime soon as there are still over 400 SPACs looking for a target. Moreover, the SPAC structure will likely continue to evolve over time as investors, sponsors and targets learn what works and what doesn’t work. While the froth may be coming off the SPAC market somewhat, that may ultimately be a good thing if the markets stabilize and what is left is another long-term viable path for companies to access the public markets.”
The article, “The Healthcare SPAC Market,” was part of the August 10 Health Care M&A News email distributed by Irving Levin Associates. More information about their content can be found here.