SPAC Deals Are Back, This Time With a Trump Bump

Special Purpose Acquisition Companies (SPACs) have staged a remarkable resurgence in 2025, fueled by regulatory shifts under the Trump administration and market volatility from aggressive tariff policies. With 44 SPAC IPOs raising $9 billion through mid-May – nearly matching 2024’s full-year total of $9.6 billion – this revival represents a fundamental restructuring of blank-check vehicles into more disciplined capital formation tools[1][3]. The SPAC 4.0 era combines hardened governance frameworks, strategic sector targeting, and a regulatory environment favoring serial sponsors, creating new opportunities and risks for dealmakers navigating the most unpredictable M&A landscape in decades.

The Resurgence of SPACs in 2025

Quantifying the Comeback

The SPAC market has demonstrated remarkable resilience, with Q1 2025 seeing 19 IPOs raise $3.1 billion – an 85% increase in deal count compared to Q1 2024[2][7]. This momentum accelerated through April as eight additional SPACs raised $1.78 billion, with serial sponsors accounting for 80% of activity[2][7]. The average deal size has expanded to $163 million, reflecting renewed institutional confidence in structured blank-check vehicles[3][7].

*Through May 15, 2025 | Sources: SPACInsider, ICR Capital[1][3][7]

The Trump Effect: Tariffs and Regulatory Shift

President Trump’s 145% tariffs on Chinese imports – later reduced to 75% after bilateral negotiations – created ideal conditions for SPAC resurgence by freezing traditional IPO markets[1][10][11]. Equity volatility (VIX averaging 32 since January) made conventional pricing untenable, pushing 72% of SMBs considering public listings toward SPAC alternatives[11]. SEC Chair Paul Atkins’ deregulatory agenda has further catalyzed activity, reversing predecessor Gary Gensler’s strict alignment of SPAC mergers with IPO disclosure requirements[1][13].

“2025 was meant to be the year of the IPO. Given the volatility from Trump’s tariff policies, those hopes have been dashed. The opportunity for SPACs is pretty incredible.” – Brandon Sun, Cohen & Company[1]

Regulatory Reforms Reshape the Landscape

SEC’s New Playbook Under Paul Atkins

The confirmation of SEC Chair Paul Atkins has ushered in a pro-SPAC regulatory regime. Key changes include:

• Relaxed financial projection requirements for de-SPAC mergers
• Extended timeline for deal completion to 24 months
• Reduced liability for forward-looking statements
• Streamlined confidential filing processes[13]

These reforms have particularly benefited serial sponsors like GS Acquisition Holdings and Churchill Capital, whose SPACs now comprise 60% of active vehicles[15].

Lessons from the DWAC Precedent

The SEC’s $18 million settlement with Digital World Acquisition Corp (DWAC) over its Trump Media merger disclosures continues shaping sponsor behavior[8]. Modern SPAC filings now include:

• Enhanced conflict-of-interest disclosures
• Third-party valuation attestations
• Staggered sponsor promote structures

“The DWAC case taught sponsors that transparency isn’t optional – it’s the price of admission,” notes securities attorney Marcia Ellis of Morrison Foerster[8][13].

Strategic Shifts in SPAC 4.0

Sector Specialization Drives Value

The new SPAC vanguard focuses on discrete verticals:

Institutionalization of SPAC Capital

PIPE (Private Investment in Public Equity) participation has shifted dramatically:

• 2021: 85% hedge fund participation
• 2025: 72% institutional (BlackRock, Fidelity, Vanguard)

This change reflects enhanced due diligence processes, with 89% of 2025 SPACs completing third-party operational audits pre-merger[3][9].

Tariff Turbulence Reshapes Capital Markets

Trump’s “Liberation Day” tariffs have created dual pressures:

1. IPO Market Paralysis: 143 companies postponed traditional listings
2. Supply Chain Realignment: $24B in nearshoring investments needing liquidity

SPACs have become the exit vehicle of choice for private equity firms holding $2.1T in dry powder[4][11]. The Kodiak Robotics-Ares Acquisition II merger exemplifies this trend, providing $551M for autonomous trucking expansion amid freight tariff disruptions[14].

Risks and Challenges Ahead

Legal Landmines in New Landscape

Despite reforms, litigation risks persist:

• Shareholder derivative suits up 42% YoY
• SEC enforcement actions targeting sponsor compensation
• Cross-border deal scrutiny under CFIUS

Market S

Sources

 

https://www.pymnts.com/spac/2025/spacs-make-9-billion-comeback-thanks-to-trump-and-tariffs/, https://www.dandodiary.com/2025/05/articles/director-and-officer-liability/guest-post-spacs-are-back/, https://woodruffsawyer.com/insights/new-generation-of-spacs-2025, https://www.excelsiorgp.com/resources/what-is-a-spac-and-why-are-they-suddenly-so-popular/, https://www.marketplace.org/2024/03/25/what-is-a-spac-and-why-do-companies-use-them/, https://blog.colonialstock.com/what-the-spac-market-is-looking-like-in-2025/, https://icrinc.com/news-resources/q1-2025-spac-ipo-market-update/, https://www.sec.gov/newsroom/press-releases/2023-135, https://bostoninstituteofanalytics.org/blog/decoding-spac-2-0-whats-different-in-the-2025-revival/, https://news.warrington.ufl.edu/faculty-and-research/bloomberg-spacs-set-to-capitalize-on-ipo-freeze-with-1-billion-deal-burst/, https://www.pymnts.com/legal/2025/businesses-sue-trump-to-halt-liberation-day-tariffs/, https://spacconference.com/sponsors/, https://www.regulatoryandcompliance.com/2025/04/the-sec-under-paul-atkins-what-to-expect-for-registered-and-private-offerings-climate-related-disclosure-consolidated-audit-trail-digital-assets-and-agency-re-organization/, https://imaa-institute.org/m-and-a-news/weekly-m-and-a-news-apr-14-to-20-2025/, https://www.spacinsider.com/news/spacinsider/full-year-2024-spac-review, https://www.investopedia.com/terms/s/spac.asp

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