SPAC Focused On IT Service Providers Withdraws IPO

CAVU Technology Acquisition, a Special Purpose Acquisition Company (SPAC) focused on the IT services market, has withdrawn its plan for a $100 million IPO (initial public offering), Renaissance Capital reported.

A SPAC — also known as a “blank check” company — is designed to raise funds in an initial public offering (IPO) with the aim of acquiring a private business, Reuters notes. The SPAC market was red hot in early 2021, but too much money chasing too few quality companies has now pressured the SPAC industry.

SPAC: Boom Then Bust?

Indeed, the SPAC boom led to excess IPO supply that’s now dragging down financial markets in early 2022, CNBC’s Jim Cramer said on January 25, 2022.

In the case of CAVU, the Tampa-based company filed in March 2021 to raise $100 million. The plan called for CAVU to eventually acquire companies in the North American technology sector — including businesses focused on IT services, software, SaaS, and/or digital transformation.

Fast forward to January 2022, and the CAVU IPO plan has now been withdrawn. No reason was given for the change of plans.

MSP Mergers and Acquisitions: M&A Activity & Private Equity Involvement

Meanwhile, M&A activity involving MSPs remains extremely strong. Many of the deals continue to involve private equity firms, established funds and new funds. ChannelE2E has tracked more than 100 M&A deals during the first three weeks of 2022.

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