(Bloomberg) — Blank-check companies settled on deals to buy a members-only startup airline, a startup augmented reality firm and a company called Two Bit Circus this month as SPACs face pressing deadlines to strike deals or close shop.
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At least 16 special-purpose acquisition company tie-ups have been announced so far in May, the most since December, chipping away at a backlog of nearly 600 SPACs that need something to buy. Almost half the targets aren’t expected to be profitable this year, according to merger presentations, which could hurt their prospects in a sector that’s been one of the market’s worst performers.
The deals have a combined enterprise value of about $15 billion, with micro-amusement park operator Two Bit Circus Inc. and zSpace Inc., a startup provider of augmented and virtual reality platforms, among the smallest targets at less than $200 million each.
While the deals might be taken as a sign that blank checks are breaking their logjam, they’re just a dent in the more than $160 billion of target-needy SPACs, data compiled by SPAC Research show. The ones with profitless prospects also could feed concerns that SPACs will buy less-than-ideal candidates as acts of self-preservation.
SPACs are called blank checks because they raise money through a public offering with the goal of buying a private business that will be identified later. They have a limited time to complete a deal, typically about two years. If they don’t, the company must return the cash to shareholders, managers can lose their jobs and the sponsors can lose their entire investment.
Among this month’s deals:
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Alpine Acquisition Corp., which debuted a year ago, is buying Two Bit Circus along with hotels owned by Atrium Hospitality LP and wrapping them together to create “an immersive story experience woven throughout the entire resort.” Completion is expected in the third quarter; they’re projecting positive net operating income in the first…
