From the Editor

Getting in on the SPACtion

KATHRYN MULLIGAN

Editor-in-Chief, Middle Market Growth kmulligan@acg.org S PACs are all the rage these days, and for good reason. By March, SPAC fundraising had already eclipsed the $83.4 billion raised in 2020. They’ve become a formidable force in the market, presenting yet another path to exit for middle-market business owners and investors. With big names getting in on the action—Bill Gates, basketball star Steph Curry and Grammy awardwinner Ciara, to name a few—it’s no surprise they’re drawing attention.

Flash and novelty aside, SPACs are having a meaningful impact on the deal landscape. Depending on who you talk to, these blank check companies pose a competitive threat that is driving up prices, a welcome source of capital available to buy businesses, another financing vehicle for private equity firms, or a flash in the pan.

In our cover story (p. 30), writer Bailey McCann explores private equity’s role in institutionalizing SPACs and some of the challenges and risks for SPAC issuers today, ranging from limited partner inquiries about how resources are allocated between PE funds and SPACs, to increasing scrutiny from regulators.

DHG LLP, an accounting and advisory firm and an ACG Official Sponsor of Growth, looks at SPACs from another angle in their “Portfolio” article (p. 50), where they highlight risks to consider before partnering with a blank check company.

The spotlight on SPACs ties in with this edition’s focus on the technology sector. Also covered is cross-border deal activity involving Canadian technology companies (p. 38), how Zoom and drones are transforming due diligence (p. 10), and much more.

Deciding which stories to run in Middle Market Growth’s tech issue was an interesting challenge, thanks to the blurred line between technology and, well, everything else.

Our health care-themed issue in the winter featured a cover story about how medical practices are using technology to improve the patient experience. Our forthcoming summer issue will focus on consumer products—and likely on e-commerce, supply chain technology and other tech-enabled innovations that are taking the industry by storm. As a magazine focused on business and M&A, every issue of MMG is now a tech issue, given how central technology has become to running a company and doing a deal.

Depending on how the SPAC trend evolves, perhaps every issue will be a SPAC issue, too. //