2008 Pivotal Year for SPAC Market, According to SPAC Research Partners 'State of the SPAC' Report

NEW YORK, April 3, 2008 /PRNewswire/ -- The coming year will be pivotal in defining the future of Special Purpose Acquisition Companies (SPACs), according to a new report, "State of the SPAC" by SPAC Research Partners, an independent research firm dedicated to providing investors with timely, accurate SPAC analysis. SPACs are publicly listed blank check companies with a mandate to acquire a business usually within an 18 or 24 month time period.

Market forces, more experienced sponsors, better-capitalized underwriters and demand for higher quality acquisitions are quickly pushing SPAC deal structures into their sweet spot. According to "State of the SPAC," the number of SPAC IPOs will decline 10% in 2008 while the average SPAC size is expected to increase 45%, to $265 million. According to SPAC Research Partners, the ideal SPAC size is between $300 million and $400 million.

"SPACs that have completed acquisitions on the average posted a 6.9% decline in stock price since August 2003, compared to an increase of 36% for the S&P 500 Index," commented Raj Nandiwada, SPAC Partners Senior SPAC Analyst. "We believe historically lower quality sponsors, overpaying for target assets, and structural disadvantages of older generation SPAC dilution have created challenges that are currently driving a revolution in the SPAC market."

Combined with weakened capital markets, this revolution is fueling a flight to quality for SPAC investors. More SPACs are being voted down in 2008 compared to 2007. According to "State of the SPAC," 25% of all SPACs in 2008 will be voted down and a significant portion will be forced to alter their terms.

Based on initial investor reaction, SPAC Research Partners believes two recent acquisition announcements are likely to be restructured from their original terms. Alternative Asset Management Corp., which announced the acquisition of Halcyon Asset Management on March 13 for $974 million, and Marathon Acquisition Corp.'s $1 billion acquisition of Global Ship Lease, Inc., are likely to be restructured in the industry's continued flight to quality. SPAC RP's proprietary warrant pricing models indicate there is only 40% chance of the Marathon acquisition closing and only a 33% probability for Alternative Asset Management Corp.

"More than 90 registration statements have been filed by SPACs this year, yet only 12 SPACs have successfully gone public," noted Michael Tew, SPAC Research Partners Senior Analyst. "SPACs are here to stay, but 2008 will be a critical year in determining the industry's future growth potential."

For more information about SPAC Research Partners and for full copies of "The State of the SPAC," please email Michael Tew, Senior SPAC Analyst, at michael@spacpartners.com or Julie Ricciardi, Director of Institutional Sales at Julie@spacpartners.com.

About SPAC Research Partners

Founded in March 2008 and based in Palo Alto, California, SPAC Research Partners is an independent research firm dedicated specifically to the SPAC market. The company provides independent, proprietary, value-added analysis of SPACs in order to enhance portfolio managers' ability to effectively evaluate a SPAC deal from registration statement to the closing of an acquisition (or fund liquidation). The company's products include its unique "Red Flag" reports, commentaries, and weekly Warrant Probability Reports. Combined with an experienced team of SPAC analysts, SPAC RP's innovative and proprietary models provide investors with detailed and timely analysis at each stage of the SPAC Life Cycle. For more information, please visit www.spacpartners.com.

SOURCE SPAC Research Partners