INTRODUCTION Contributed by: George Casey, Linklaters
England and the Federal Reserve, along with robust stock market performance and stronger expectation of a soft economic landing in the USA – all of which have given deal makers the optimism required to end the year on a strong note. Tech Exits Technology companies that decide to continue their journey as independent players on their path to profitability can choose from a variety • a de-SPAC transaction (ie, a merger with a special purpose acquisition company – although de-SPACs have significantly declined as an option for a number of rea- sons). Global exit value has seen a significant decline after reaching a record high in 2021, largely driv- en by M&A and IPO exits. Tech exits declined further in the first half of 2024. IPOs 2023 proved to be another challenging year for the IPO market with the number of tech IPOs continuing to decline after a record year in 2021.The number of IPOs increased slightly in Q2 2024; however, it remains significantly lower than levels seen in 2021. SPACs of forms: • an IPO; • a direct listing; or SPACs are set up by raising money from public investors for the specific purpose of finding an acquisition opportunity. If a SPAC finds it, the private target:
• is merged into the SPAC in a so-called de- SPAC transaction (yet another alternative to a traditional IPO); • gets additional funding through a PIPE invest- ment; and • becomes a publicly traded company at clos- ing. As an alternative to an IPO, a de-SPAC trans- action is more likely to be pursued by less established, younger companies. Prevalent in the USA, SPACs started pursuing cross-border deals in 2021, and some countries were devel- oping regulations to facilitate SPAC listings in their markets. During the COVID-19 pandemic, SPACs pro- vided an alternative path for a company to go public. However, the SPAC market has been in steady decline since 2022, with fewer SPAC and de-SPAC transactions completed. According to SPAC Analytics, SPAC IPOs have made up the following percentages of total US IPOs since 2020: • 55% in 2020 (and 46% of total US IPO pro- ceeds); • 63% in 2021 (and 49% of total US IPO pro- ceeds); • 73% in 2022 (and 59% of total US IPO pro- ceeds); • 43% in 2023 (and 15% of total US IPO pro- ceeds); and • 38% in 2024 (and 19% of total US IPO pro- ceeds). According to Dealogic, the number of complet- ed de-SPAC transactions (for SPACs registered with the SEC) has also been in steady decline, including: • 64 in 2020;
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