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Cancelled SPAC Technology Mergers: List of Abandoned M&A Deals Grows

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Wall Street's brief and heated love affair with SPACs (Special Purpose Acquisition Companies) continues to cool off.

The list of SPACs and technology companies that announced but then abandoned M&A plans involves such sectors as 3D printing, telecom services, robotics and e-commerce platforms. Take a closer look and $16 billion work of SPAC deals were cancelled from January through May 2022. The cancellations offer a cautionary reality check for MSPs and IT service providers that were exploring potential SPAC engagements.

Cancelled M&A: Technology Mergers That Weren't

Examples of cancelled M&A SPAC deals include these abandoned hookups:

  1. 3D Printing: Atlantic Coastal Acquisition Corp.'s deal to take Essentium public has been mutually terminated. Source: Reuters, February 11, 2022.
  2. Telecom Services: Syniverse Technologies and blank-check firm M3-Brigade Acquisition II Corp ended their merger agreement. Source: Reuters, February 9, 2022.
  3. IT Services: CAVU Technology Acquisition, a SPAC focused on the IT services market, abandoned its plan for a $100 million IPO (initial public offering) in January 2022.
  4. Software: Software firm Corcentric and blank-check firm North Mountain Merger said they would terminate their $1.2-billion merger deal. Source: Reuters, August 29, 2022.
  5. E-commerce and Hospitality Systems: (parent of, and Astrea Acquisition Corp. canceled their M&A agreement. Source: Business Travel News, February 14, 2022.
  6. Robotics and Medical Equipment: Surgical robotics firm, Memic Innovative Surgery and Medtech Acquisition Corps announced mutually terminating a merger. Source: MD and DI, March 10, 2022.

The cancelation trend emerged in 2021. Indeed, 17 SPAC mergers, valued at a combined $37.2 billion, were terminated during the final six months of 2021, compared to four worth $720 million during the six months prior, according to data provided to Forbes by financial data firm Dealogic. Just seven SPAC deals were terminated in 2020, that Forbes/Dealogic report stated.

What Is A SPAC?

The SPAC trend was red-hot in early 2021. A SPAC or “blank check” company is designed to raise funds in an initial public offering (IPO) with the aim of acquiring a private business. That private company then becomes public as result of the merger, Reuters notes.

The SPAC trend helped to fuel $63 billion of IPO fundraising worldwide in January 2021, more than five times the proceeds from the same period a year earlier, Bloomberg reports.

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

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.