Good Second Quarter for Reverse Mergers
By David Feldman at 30 July, 2010, 9:35 am
Now that we have completed the Dodd-Frank Show here at the RM blog, it’s time to return to our title topic (though not much to report on SPACs, in fact there’s been no new SPAC Report from DealFlow since late May)! The good news is, according to The Reverse Merger Report, that reverse merger deal volume is again up. A total of 69 reverse mergers were completed in the second quarter of 2010. China stayed steady at 32% of all deals in the quarter, though Chinese companies have had to adjust to lower valuations. Several people quoted in the story indicated they believe the average value of deals will continue to rise.
The world continues to grow smaller for reverse mergers, as deals in the second quarter came from South Korea, Ireland, the UK, Turkey, Chile, Australia, New Zealand and Brazil. How about Russia??
We did see a big drop in the average market capitalization of companies completing reverse mergers. In the second quarter the average was $12.6 million in market cap, whereas that number was $21.4 million in the first quarter. The average funding size is also down from $4.8 million to $4 million. But put that in perspective. The total raised in deals in just the first half of this year ($200 million) is more than was raised in all deals from October 2008 through December 2009 ($174 million)!
Nice to have good news to report.
Are SPAC’s viable anymore and where are the available ones listed?
Penn – SPACs are slowly coming back, I think I blogged on this a few times recently. I think one actual merger has been completed and there are a handful that are in the process of completing their IPO or have done so. They are smaller than the big ones of the past and have replaced shareholder approval of the merger with a tender offer for those not liking the deal to get their money back without voting it down. DealFlow Media’s Registered Offerings Report covers SPACs.