SPAC Updates: Market Activity, Target Supply, and Investor Leverage in 2026

Josh Wilson: Good day everybody. Welcome to the SPAC podcast, the number one show on all things SPACs. We're glad you are here. Today we're having a conversation, host and co-host having a conversation with Mike around an update in the SPAC market, like front of office s back of office. Mike, kick us away, man.

Give us an update. 

Michael Blankenship: Thanks, Josh. This is the first recent statistics here. We're looking at a very active SPAC market. There's over 220 SPACs actively seeking merger targets with over a hundred and five that have actually announced pending business combinations. So it's, you're looking at over 300 total there, and that's a healthy number.

The activity remained strong. There were, 51 new ones in 2026 alone as of the end of February. That's, it's pretty interesting to see such, volume and IPO momentum there. There's quite a bit. And then there's only been five or so d specs that have closed in 2026.

Not with staying. I knew, I know personally I've got. Three or four that will close in March and April. Certainly underscores there is an imbalance between the new issuance, the new paper out there on the SPACs versus the ones that need to complete the business combination. So what that means, Josh, and I know we'll get into, it's like the market is looking at that and I think it's certainly become more investor friendly in terms of.

Structured more that way. So like anything in, in economics, supply and demand driven. So more supply and moorings, more investors have, the leverage. And so a lot of that leverage to dictate terms, meaning, they can be shorter than, they'll typically be shorter than 24 months, which was the standard length.

There'll be, half warrant or better. So third warrant, quarter warrant. Now we're, back to the half warrant or some or rights. And so things have changed a little bit. So a lot of that competitive pressure amongst SPACs continues to be there and really have to differentiate.

Differentiate yourself, around sponsor quality, around sector focus, and just really the ability to get capital for that target at the end of the rainbow there, end of the deal. And so good market, healthy market, but I think we're, we're starting to see tighten up a bit more just given the imbalance.

Josh Wilson: So with the heavy supply of, SPACs coming on, it's good for investors, right? 'cause then now they can choose where to go. And there's that's the supply there. What, how does it impact, the private companies who are now potential targets? There's a lot of SPACs on the play. Does that, is that good for the targets as well?

Michael Blankenship: Yeah, it's you. You can do a bake off with various SPACs and determine which one's sort of the best for your particular situation. Do you have. It's a particular sponsor that has operating experience in that area, or do they have a sponsor that can bring capital to the transaction that may be needed to close it up?

There are a lot of. Various ways that it helps that target as it's negotiating. With the spac, maybe they don't want as much dilution from the ownership of the sponsor's ownership, so maybe they can negotiate some of that or use some of that as leverage to keep investors in the deal as well.

So there's a lot of options with it. 

Josh Wilson: Yeah. Now when it comes to the, abundance of, healthy market for IPOs and SPACs coming on, that's awesome. It, it sounds awesome. Is there enough de, is there enough supply of private companies to fill that need or are they having a hard time finding good?

Private companies to go after. 

Michael Blankenship: The reality is I do think there's still a lot of good targets out there. If you go back and look at just the tech sector alone, there's a ton of decacorns, meaning they're more than $10 billion valuation. And that probably translates even more of abundance of companies.

The question is getting them into the mindset of doing a spac, because, the traditional IPO market really isn't taken off just yet as, as predicted. So a lot of people may want to go through that SPAC route and, work with a sponsor, have PEG evaluation at the time, which is unlike an IPO where they have to go out and.

Figure out what that valuation is, the SPAC will peg it. And then, typically if it's the right kind of sponsor thought process, we'll go get a fairness opinion to figure out that valuation is fair to the shareholders. So we'll see. I do think there's a, a pretty good market and a lot of targets out.

There just has to be ones in the right sector. 

Josh Wilson: For sure. What are you seeing in the world of, private equity or family office involvement in SPACs, from the investment side to maybe even producing some targets for them? What are you seeing? 

Michael Blankenship: Yeah, I think it's the whole ecosystem.

So on the, private equity side, you see some that come out and create their own spac. So they're then looking at other potential targets as a vehicle because sometimes they can't deploy the capital they have. To Port Co. And so maybe they're using that to go find one that they can take public.

Of course, it has to be a private equity that's willing to do that. And then on the family office, they're not gonna cut the huge checks typically, but they'll, they could cut a check to be at the, at risk capital, meaning early on before the IPO. Or you can have ones that are, coming in and showing other investments they had done.

So maybe that's a good investment for them. So it, it helps in that regard too. But you've got, a bunch of capital out there still sitting and people could come in and hopefully invest, maybe the family office comes in on, on a on a pipe offering at the time of. Announcement of the business, combination of a SPAC with a target, or maybe it comes in later, or, does something to support the transaction.

Remember you have to have private equity family offices that are interested in public securities. A lot of ones have pulled away from that, but I do think there's still a number of them out there. And so the right ones could find the right deal that's within their wheelhouse and area that they're seeking.

Josh Wilson: Yeah. Now what about like port co companies in, that are private equity backed or family office backed. Do you think that they're considering, maybe IPO wasn't a good fit, but do you think that this might be a different play for them specifically? 

Michael Blankenship: Yeah, I think it could be a different play for them specifically in the way that they do peg that valuation, do get a SPAC involved and really hear more about, how the SPAC can help it going on the go forward, teaming up with that private equity or that family office to do it.

So I do think there's some of that and baked in to that decision. 

Josh Wilson: Yeah. So for the family offices or private equity groups that have a, portfolio company, I, heck, maybe even a VC group that has one of these portfolio companies and they're going, we're not finding a suitable buyer or suitable exit for this.

What are the kind of the next kind of thoughts should they be having before, before maybe going to the market? Or what questions should they be asking you? 

Michael Blankenship: Yeah, one is what's the market look like? 'cause we work on a lot of these deals, so just, we can provide some commentary around that.

And then two, kinda what it means to, to start dancing with the spac and getting what, the various steps and we can get there and then, ultimately need to find out what their goal is. Is it to be a public company with or and then hold restricted securities for a period of time.

Or do they want to go do the sale? And maybe to your point there, Josh, they don't have the ability to do that because the bid ask spreads are be so wide now among some of the private equity transactions that they're not able to sell because they'd be maybe selling at a discount for where their investment was, if they win it in on some other, trade or try to do a fire sale.

So maybe the best play is to put through a SPAC and get. Some certainty around the value and then coming out on the other end as a pco and then having those shares that they would have the option to sell, down the road. 

Josh Wilson: When it comes to, your involvement in SPACs, at what stage do you most enjoy participating in SPACs?

Michael Blankenship: Yeah, I think if it's, from the IPO, it's obviously getting, working with issuers and sponsored and forming help form. Now typically it's Cayman, so we have Cayman lawyers on there that do that. But it's early on, we help, draft the S one, get it done there. If it's on the back end.

We're also, I enjoy working on both SPAC and the target side. Target side's great. Typically, they become the pubco or a public company and we continue to work with them. Now, that said, we have represented SPACs and later took over as Pubco council. Not uncommon for us, we have a great team here, but I do all of the.

Mix of transactions. And I work with underwriters too, so I work with a lot of different investment banks that are out there, underwriting the IPO or end up being, placement agent council for the pipe or some other period. And the transaction. There are a lot of providers, a lot of deal flow.

There. 

Josh Wilson: So when it comes to the future of the SPAC podcast what kind of guest? We've interviewed a ton so far and we've had a blast doing it. We sh we started with a short strategy. People could go to our YouTube and they could see these mini clips, one to three minutes long.

Very topical, the top 100 most asked questions around spac. So we started there. Now we're going more into long form. What kind of guest would you like to see more of on the SPAC podcast? 

Michael Blankenship: I, you are right Josh. We've had some wonderful guests on, and, we'll continue to do I do think it's interesting to hear an investor's viewpoint, so we'll get more of those on there.

I think getting the, targets, potential targets that are out there looking or ones that have, we've had pcos, but, some of those would be good to get their perspective on the market. And, what's the pros, cons, what's the mistakes?

What went well? What went wrong? We hear it from all of 'em, preparation is king and so making sure you've got you got that done early and get it, advisors in there. And be prepared. 

Josh Wilson: Yeah. Super cool. Any final thoughts before we say goodbye for today's update?

Michael Blankenship: I think it's been a great update here. I think the market continues to be somewhat frothy and I think we'll continue to see that for hopefully the coming months. We have a favorable regulatory environment at the moment where you're able to get through some of that. And so I think we'll continue to push forward on that.

And

Josh Wilson: cool. Ladies and gentlemen, fellow spac enthusiast as always head on over to the SPAC Podcast. Make sure you subscribe, listen in, and if you have questions around SPACs, we would love to hear them. Maybe we'll talk about it or maybe have you on the show to talk about it specifically, so the spac podcast.com.

Fill out a quick form, start off the conversation till then, we'll talk to you all on the next episode. Cheers, everyone.