{"id":7716,"date":"2021-05-18T08:54:26","date_gmt":"2021-05-18T08:54:26","guid":{"rendered":"https:\/\/nmsconsulting.com\/7716\/what-is-the-future-of-virtual-events-copy\/"},"modified":"2022-03-04T22:14:59","modified_gmt":"2022-03-04T22:14:59","slug":"ma-frenzy-driven-by-spacs","status":"publish","type":"post","link":"https:\/\/nmsconsulting.com\/ma-frenzy-will-continue-driven-by-spacs-how-you-can-benefit\/","title":{"rendered":"M&A Frenzy will Continue, Driven by SPACs"},"content":{"rendered":"

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In Q1, mergers accomplished via SPACs were valued at a record $232 billion, and represented 17% of deal activity.<\/em><\/span><\/p> <\/div>\n<\/div>\n\n

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According to Refinitiv, global M&A activity reached almost $1.4 trillion in value in Q1 of 2021, representing a 94% jump year-over-year. The activity was led by technology companies and SPAC deals, with additional buoyancy from low borrowing costs and a stock market at all-time highs. With the Federal Reserve stating they do not plan on being hasty about increasing interest rates, these low costs should continue and offer a strong backdrop to M&A, including SPAC deals. <\/span><\/p>

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When breaking down the numbers, we see that the tech sector accounted for 21% of all Q1 2021 deals, which totaled $274 billion in value. The next largest set of deals took place in the Financial sector, which was 16% of all deals in Q1 2021. Regionally, the U.S. was the home of about half of these deals with a value of $670.5 billion, representing a 161% surge year-over-year.<\/span><\/p> <\/div>\n<\/div>\n\n

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As more companies look for ways to grow, cut costs, and quickly go public, SPACs have been a favored method. In Q1 of this year, mergers accomplished via SPACs were valued at a record $232 billion, and represented 17% of deal activity. In April of this year, ride hailing start-up Grab\u00a0announced it will merge with a SPAC, sponsored by tech investment firm Altimeter Capital. The deal valued Grab at roughly $39.6 billion, making it the biggest SPAC deal ever.<\/span><\/p>

Another catalyst that may boost M&A activity across the globe is an increase in corporate taxes, which President Biden has already put into motion. This is because companies that will be impacted heavily by an increase in taxes will look to strengthen themselves by merging with another company.<\/span><\/p>

COVID-19 has also had a big impact on M&A and how it is conducted. These changes include deal terms, new due diligence issues, the availability of and pricing for other terms of deal financing, and the time it will take to close transactions. With most principal players working remotely, the use of new and collaborative techniques has become crucial. \u00a0Additional due diligence issues include:<\/span><\/p>