Private equity is watching the consolidation of the North American oil and gas sector from the sidelines, instead focusing its energy efforts on renewables.
The experts say yes. SPACs representing $53 billion in investments accounted for about half of all IPOs this year — providing a pathway to public markets for emerging clean tech companies developing disruptive, pre-revenue technologies.
The market for initial public offerings dropped way down this year. Or did it? There is a surge in activity in a different kind of IPO: a special purpose acquisition company, or SPAC. It’s also known as a reverse merger. SPACs are shell companies listed on exchanges with a mission to buy private companies and convert them into public ones. According to a tally from Barron’s, there have been 70 IPOs through this method in 2020, with proceeds totaling $27.7 billion. It’s creating a path for little-known, pre-revenue cleantech companies to gain access to public markets. There are now 10 companies related to the energy transition that have gone public or plan to go public through SPACs in 2020. Does all this frothiness make sense? And why is all this activity happening now? We’ll explain on this week’s episode of The Interchange.