A blank-cheque boom in February

Blank cheque

By Brenon Daly, Research Director, 451 Research, part of S&P Global Market Intelligence – Boosted by an unprecedented shopping spree by blank-cheque companies, the tech M&A market extended its stunning rebound from last spring's Covid-19 collapse. Acquirers of all varieties spent USD87 billion on tech and telecom deals around the globe in February, according to 451 Research's M&A KnowledgeBase.

This month marked the eighth consecutive month of acquisition spending that's roughly twice the level of a typical month. However, for the first time in the recent record run, a new buyer is leading the market higher: SPACs, or special-purpose acquisition companies.

These deep-pocketed acquirers have been doing deals in February at a head-spinning pace, signing off on billion-dollar cheques almost every single day in February. Overall, their unprecedented purchases pushed what had been shaping up to be a very ordinary month for spending on tech acquisitions into the extraordinary. According to the M&A KnowledgeBase, SPACs accounted for more than half of all spending on tech and telecom transactions in February.

Our data shows that these acquisition vehicles announced deals this month valued at USD50 billion, handily topping the USD37 billion doled out by the other two mainstay buyers, corporate and financial. That's a stunning reversal, upending the typical M&A process that for decades has meant tech vendors looking to sell either ended up inside a larger company or a private equity portfolio.

Just in February, our database tallied 20 'reverse mergers,' with all but two of them valued in the billions of dollars. Significant SPAC acquisitions this month include the USD4.4 billion takeout of genetic testing startup 23andMe and the double-barrelled purchases, totalling USD4.9 billion of spending, of 3-D printing providers Matterport and Markforged.

For comparison, corporate shoppers and private equity firms jointly announced only 12 billion-dollar transactions, one-third fewer than SPACs. Among this month's relatively few non-SPAC blockbusters, chip consolidation continued with Renesas' USD5.9 billion pickup of Dialog Semiconductor and Electronic Arts' USD2.4 billion reach for Glu Mobile.

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