SPAC Statistics Round-Up from SPACInfo.com

As we enjoy this pause in the capital markets, it's time to take stock of SPAC statistics over the past five years.

There have been no SPACs priced since Chardan 2008 China Acquisition Corp.'s August 12, 2008 $55 million IPO. The following figures include proceeds from overallotments (Green Shoes) at IPO:

• Total Raised by SPAC IPOs During 2007-2008 YTD: $15,584,855,632
  
• Total Raised by SPAC IPOs During 2003-2007: $6,123,511,707
  
• Total Raised by SPAC IPOs Since 2003: $21,708,367,339
  
• Largest Amount Raised via SPAC IPO: $1,035,000,000
  
• Total Dollar Amount of SPACs Awaiting IPO: $14,244,250,008
  
• Number of SPAC IPOs During 2007-2008 YTD: 80
  
• Number of SPAC IPOs Awaiting IPO: 84
  
• Number of SPAC IPOs Since 2003: 158
  

All these figures were taken from the SPACInfo searchable database, available here.

Click here to learn more

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SPAC Management Teams Move to Reassure Jittery Investors

We're sure you've noticed a slew of 8-Ks recently where SPAC sponsors have attempted to reassure investors that the cash trusts are safe. In certain cases, SPACs have moved monies from foreign to domestic trust accounts.

According to the Wall Street Journal:

"In most cases, after receiving calls from concerned investors -- mainly hedge funds -- the SPACs decided to either change their asset mix or send out a blanket statement of reassurance. During the past two months, more than two dozen SPACs have issued news releases reassuring their investors that their trust accounts are safely invested in government-backed bonds or telling them that they have decided to switch their asset mix completely into the safety of U.S. Treasurys."

Click here for the Wall Street Journal article

Kanders Acquisition Company SPAC Pulls its $400 Million IPO

The November 14, 2008 withdrawal of Kanders Acquisition Company (KAC) from SEC registration marks yet another casualty of the market's lack of appetite for SPAC IPOs. Even more telling about the general market environment is the end of this eponymous SPAC from a serial SPAC entrepreneur:

Warren B. Kanders, Director and Chairman of KAC is also a director of Highlands Acquisition Corp., a $138 million SPAC focused on the health care industry that is still looking for an acquisition target. Mr. Kanders was formerly the President of Kanders & Company, Inc. which sold Armor Holdings, Inc., a manufacturer and supplier of military vehicles, armed vehicles and safety and survivability products to BAE Systems plc on July 31, 2007.

KAC, which has been on file since October 24, 2007, was set to price its $400 million IPO on the American Stock Exchange with a sponsor purchase of 6,000,000 warrants at $1.00 per warrant and commitment to a limit order of up to $25 million of common stock around the time of target acquisition.

Citi, Wachovia and WM Smith Securities were set to underwrite the offering.

Click here for the release

Yale School of Management Paper Argues That SPAC Shareholders Consistently Approve Value-Destroying Transactions

In his October 13, 2008 paper, Stephan Lewellen argues:

"...that Special Purpose Acquisition Companies, or SPACs, represent a new asset class that is fundamentally distinct from other types of publicly traded equities. SPAC shareholders consistently approve value-destroying transactions despite being given voting rights not found in any other U.S. equity instrument, raising important theoretical questions about optimal voting mechanisms.

Furthermore, SPACs' highly predictable lifecycle yields highly predictable returns, with a monthly four-factor portfolio alpha of approximately 3% following the announcement of an acquisition and -2% after an acquisition has been completed. SPACs also frequently trade at a discount to their theoretical lower bound prior to the announcement of an acquisition, implying that the option value of future acquisitions is negative. Finally, SPACs completing an acquisition have a market beta of less than one despite an average leverage multiple of 2.5, yielding new evidence in the debate over the relationship between beta and leverage."

Click here to download the full paper (Click "Download" above the abstract)

SPAC Database Updated!

After not much news to report lately, we have done a full sweep of our fully searchable SPAC database to update it as of today, November 13, 2008.

In spite of recent events in the capital markets, there has been quite a bit of M&A-related activity, so subscribe now to see the latest information. In particular, we've seen recent news from the following that is reflected in the database:

Affinity Media International Corp
Alpha Security Group Corp
Alyst Acquisition Corp
Arcade Acquisition Corp
Ascend Acquisition Corp
China Holdings Acquisition Corp.
China Opportunity Acquisition Corp
ChinaGrowth North Acquisition CORP
Dekania Corp
Enterprise Acquisition Corp
FMG Acquisition Corp
GHL Acquisition Corp
Global BPO Services Corp
Granahan McCourt Acquisition Corp
Heckmann Corp
InterAmerican Acquisition Group Inc
Middle Kingdom Alliance Corp
Oceanaut, Inc.
Pantheon China Acquisition Corp
Pinpoint Advance Corp
Polaris Acquisition Corp
Renaissance Acquisition Corp
Restaurant Acquisition Partners, Inc.
Rhapsody Acquisition Corp
Santa Monica Media Corp
Shine Media Acquisition Corp
Tailwind Financial Inc
Trans-India Acquisition Corp
Union Street Acquisition Corp
Vector Intersect Security Acquisition Corp

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