Autotech: SPACs Impacting Autotech Exit Market

• Two of the three largest transactions in Autotech during 2H2020 were led by special purpose acquisition companies (SPACs)
• 50 autotech deals signed in 2H2020 – the highest number in three years
• Car sales in Europe recovering quicker than expected after massive impact of Covid crisis
 

London, UK – 16 March 2021.The latest Autotech M&A market report from Hampleton Partners, the international technology mergers and acquisitions advisor, reveals how two of the three largest autotech transactions during the second half of 2020 were led by “special purpose acquisition companies” (SPACs).

The largest acquisition in Autotech was by Gores Metropoulos’ acquisition of Luminar Technologies for $3.4bn in August 2020, after which it listed the company on the Nasdaq. Luminar Technologies provides advanced long-range, high resolution lidar and perception systems to enable safe autonomous transportation.

The third largest acquisition was by SPAC Thunder Bridge, which acquired “system-on-chip” manufacturer Ay Dee Kay, now known as Indie Semiconductor for $1.5bn. Indie Semiconductor’s integrated semiconductor and software solutions underpin new automotive applications.

Overall, the Autotech sector saw an increase in the number of M&A transactions in the second half of 2020, with 50 deals inked, a 25 per cent increase compared to the 40 deals recorded in 1H2020 and the highest level since 2H2017.

Covid-19 hit the automotive supply chain and various strategic players hard in the first half of 2020. As the coronavirus crisis unfolded, the car industry saw its supply chain constrained, with limited access to parts and raw materials sourced from China. At the same time, the market saw a drastic reduction in demand, with sales tumbling in the face of unemployment and financial uncertainty.

The EU suffered a 24 per cent drop in new passenger car registrations in 2020. France, Italy and Spain, all heavily affected by the Covid-19 pandemic, suffered above-average sales declines of 26 percent, 28 per cent and 32 per cent in 2020, respectively.

Germany, the EU's largest automobile market that had a good handle on the pandemic for long stretches of 2020, saw registrations drop by "only" 19 per cent. 

The second half of 2020 looked very different for the automotive sector, with car sales in Europe exceeding the pessimistic predictions from early 2020.

Miro Parizek, principal partner, Hampleton Partners, said:

“Ultimately, the vaccine rollout that began at the end of 2020 has provided some hope for the automotive market after pandemic-related restrictions and a drop in productivity. This newfound optimism, supported by stable consumer spending and purchases financed with cheap debt, translated into market confidence.

“What onlookers had predicted would be a monumental decline turned out to be more of a short-term hit. Car sales in China bounced back at phenomenal speed, and car sales in Europe returned to more normal levels in the second half of 2020, with a flurry of activity over the summer of 2020.

“We believe this positive trend is likely to continue, forcing the auto industry to shift focus back to advancements in research, development and technology which will all drive M&A activity.”

Hampleton’s Autotech M&A report analyses transactions, trends and activity across the Enterprise Applications, Internet Commerce & Content, Embedded Software & Systems, and Mobility & Fleet Management segments of the sector. 

Jane Henry
Email: jane (at) marylebonemarketing.com
+44 789 666 8155
www.marylebonemarketing.com

Note to Editors:

Hampleton Partners’ M&A Market Reports are compiled using data and information from the 451 Research database (www.451research.com), a product of S&P Global Capital IQ, a product of S&P Global; CB Insights and more.

Download the full Hampleton Partners’ Autotech M&A Market Report 2H2020:
https://www.hampletonpartners.com/reports/autotech-report/.

Hampleton Partners is at the forefront of international mergers and acquisitions and corporate finance advisory for companies with technology at their core. Hampleton’s experienced deal makers have built, bought and sold over 100 fast-growing tech businesses and provide hands-on expertise and unrivalled advice to tech entrepreneurs and companies which are looking to accelerate growth and maximise value.

With offices in London, Frankfurt, Stockholm and San Francisco, Hampleton offers a global perspective with sector expertise in: Artificial Intelligence, Autotech, Cybersecurity, Digital Commerce, Enterprise Software, Fintech, Healthtech, HR Tech, Insurtech and IT & Business Services. 

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