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European SPAC market looks set for a busy 2022

25 January 2022

Boudewijn Thus

Business Development Director, Capital Markets

Boudewijn Thus

Business Development Director, Capital Markets

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New announcements on IPOs and other business combination deals are expected for the buoyant SPAC sector in the first half of 2022

Europe looks poised to enjoy the benefits as special purpose acquisition companies (SPACs) activity moves out of the US. A flurry of announcements around IPOs and other deals are likely to kick off a busy 2022.

The SPACs market is now maturing in the Netherlands, with investors on Euronext Amsterdam back at the table and new combinations announced. We expect more announcements in early 2022 and should see the market really lift off.

The SPAC market in Europe recently saw three impressive IPOs. The deals for EPIC, for a value of €150m, and Pegasus Entrepreneurial Acquisition Company Europe (PEACE) – worth €210m – were assisted by Intertrust Group on the escrow side.

On the business combination side Intertrust Group acted for Odyssey, which announced a combination deal with BenevolentAI valued at €1.5bn. Odyssey was listed early July.

There has also been an announcement from EFIC1, signing a business combination with digital entertainment company Azerion in a deal valued at €1.3m, in which Intertrust Group was again involved on the escrow side. EFIC1 was listed in March 2021.

Listing rule changes open up SPACs opportunities

The industry expects more large announcements in early 2022. Excitement has been heightened by the news, from December 2021, that the SIX exchange in Switzerland is allowing SPACs listings, after changing its rules.

The first Swiss SPAC listing was announced on 6 December 2021. VT5 Capital was listed in December and the IPO was oversubscribed, raising about 200m Swiss francs.

As Switzerland becomes an important SPAC player, Intertrust Group has been holding virtual roadshows in the country, sharing our insights in the market and our 2021 experiences with law firms and other interested parties.

How has the SPACs market changed in the past year?

The market has changed significantly since January 2021. At the beginning of the year there was a flood of deals and huge investor demand. It could not really be called an investor market at that point because the appetite for SPACs was so great that the sponsor groups could dictate terms and offerings were oversubscribed.

That changed over the summer when investors pulled back and reassessed the situation. At Intertrust Group that gave us space to catch up with demand and see deals through that had been in the pipeline.

By September of 2021, demand had picked up again as the market matured. This means there is still a very healthy pipeline that will take us into the second quarter of 2022. We have some great projects on the horizon in this market, and with the experience we have gleaned from the last year, we expect 2022 to do a strong year.

Which new markets are opening up for SPACs in 2022?

Until recently, SPACs were listed on the New York stock exchange or in Amsterdam, which was the centre of European SPAC activity in 2021.

Aside from the exciting opportunities in Switzerland, we are looking at interesting projects in the UK and are investigating France and Sweden. We are also following the developments in Italy and Spain closely

In Switzerland it is significant that the stock exchange is supportive of the SPAC market and the regulator is working to make the changes necessary to get this done. Switzerland is an exciting market, and we expect to see a couple of listings in the first quarter, with momentum building from spring onwards.

Countries such as Switzerland recognise the potential of this market and we believe many of its European neighbours will follow.  In every country the services we offer are similar, so we can offer services throughout Europe.

We are seeing promising developments in the UK, which after the change in the London Stock Exchange could be an interesting market for SPAC companies and investors. Hambro Perks, the venture capital firm, launched its first SPAC on the London Stock Exchange in November 2021. This is the first SPAC to be launched on the London Stock Exchange with a structure reflecting the Financial Conduct Authority’s new rules that came into force in August.

For companies to be SPAC targets, they need to be fast growing. Many of the deals we see are in FinTech, data-driven activities and pharma.

How Intertrust Group can help with SPAC services

We offer domiciliation, accounting, escrow and corporate secretarial work around SPAC deals. Accounting and escrow are where we can really make a difference because, as an independent organisation, we can negotiate the best deal for our clients.

We have done a lot of work with regulators and accountants to build a template across the market and we have a degree of flexibility which the larger banks do not have. We at Intertrust Group were involved in nearly all the SPACs that were listed in Europe in 2021; overall, we are very excited about upcoming opportunities in the SPAC market and are expecting to see a renewed uplift in activities in 2022.

Why Intertrust Group?

  • Experience in providing world-class trust and corporate services to clients around the world.
  • Our 4,000 professionals work together across 30 jurisdictions to offer an undisputed global reach, deep local knowledge and an extensive international network to help clients achieve their strategic goals.
  • Intertrust Group provides a wide range of financial and administrative services to clients operating and investing in the international business environment. We help companies to expand globally, offering support with restructuring, outsourcing and further developments.

 

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