In the last 6-8 months, I think those of us in the SPAC market have noticed a significant disconnect in what potential targets are asking in consideration for their companies and what SPACs (and by extension, public investors) are willing to pay for potential targets. The Wall Street Journal article cited below indicates that this disconnect is being felt in the mergers and acquisitions market generally, where the value of deal announcements for the first six months of the year were valued at 37% less than from the first six months of 2022, and at their slowest since 2020 (or 2013, if we don't count the beginning of 2020, since it was the start of the pandemic).  While the specific cases they write about are anecdotal, they could be writing about any number of situations I have experienced.

There was some suggestion in the article that conditions might improve by year end. However, until such time as there is a noticeable improvement in market conditions, SPAC management teams should be prepared to discuss valuation with potential targets upfront to assess the willingness of potential targets to negotiate. Likewise, potential SPAC targets should discuss their bottom-line valuation upfront so that SPAC teams can realistically assess the likelihood of a successful transaction. A little direct, upfront communication between teams should save both sides time and expenses in the long run.