Who said SPACs were yesterday’s news? Apparently not Spectral MD, the AIM-listed medical technology company, which just signed a deal with Rosecliff Acquisition Corp I to reverse into a NASDAQ listing with an estimated enterprise value of US$170mln (£134mln).
For the record, SPACs, aka special purpose acquisition vehicles, aka blank check companies, are listed companies with the sole mandate of acquiring a private company to take public through what’s known as a reverse merger.
SPACs were a major driving force behind the 2021 bull market, but the bubble has since burst after many reverse mergers failed to live up to the ridiculous valuations thrown around by promoters at the time.
The Rosecliff deal seems like great news for Spectral MD though, which will jump onto the artificial intelligence bandwagon by rebranding to Spectral AI, but another blow for the Square Mile, which is bleeding plcs left right and centre.
No one can really blame Spectral’s board for dumping AIM for Nasdaq, given that the US$170mln valuation is more than twice that of Spectral’s all-time AIM high.
A similar justification was given by Britain’s prized semiconductor designer Arm Holdings, which has pipped for a New York listing, and also by construction blue chip CRH, which is about to move its primary listing across the Atlantic.
It’s an issue that the City can’t ignore any longer- how can you convince a company to stay local when it can get a 100% premium to its existing valuation elsewhere?
In simple terms, the Americans value health-tech companies more highly. That includes Spectral’s DeepView technology, which has the ability to tell whether a wound needs surgery or not with better than 90% accuracy, which in turn saves hospitals time and money.
Expected to complete in the third quarter, the deal was called “an excellent strategic move for Spectral MD” by chief executive Wensheng Fan, and it also proved an excellent play for Spectral’s existing shareholders.
AIM-quoted shares in the group ripped 50% higher this week, hitting a peak of 44p on Friday, making Spectral the second-strongest performer on the junior market.
The top spot went to another medtech group, Synairgen PLC (AIM:SNG, OTC:SYGGF), which rallied over 80% to hit a year-to-date high of 16.6p.
There didn’t appear to be much in the way of catalysts for the specialist respiratory biotech company’s share rally, but you can almost hear those American SPAC managers licking their chops.
Newly listed Ocean Harvest takes off
Elsewhere on AIM, things appear to be going well for Ocean Harvest Technology Group following last week’s IPO that brought year-to-date AIM listings to the princely sum of three.
The group, which makes the seaweed-based animal nutrition product OceanFeed, added more than 40% in its first full week of public trades, closing with a share price of 24.6p and a market capitalisation of £31mln.
Another strong performer in the medical sector was ImmuPharma, which ripped 60% higher to 3.1p after sharing a promising update on its lead asset, the P140 neurological disease treatment.
In the industrial segment
Over to the heavy industries, Kodal Minerals surged 50% higher after Chinese authorities gave the nod to Hainan Mining Co.’s US$118mln financing package for the Bougouni Lithium Project in Mali.
Mining company Vast Resources had a bit of a rollercoaster week. After dipping around 6% on Wednesday after raising just nearly £1mln via a placing of new shares, shareholders rallied behind the Romania and Zimbabwe-focused exploration group, driving shares 10% higher on Friday to restore equilibrium at 0.52p.
Van Elle Holdings rounded the week off 8.5% lower after the ground engineering contractor noted a softening in trading and investment delays in its Friday trading update.
Trinity Exploration & Production dipped 5% after a generator-related fire occurred on Trinity's Bravo Platform in the Trintes Field offshore east coast Trinidad, resulting in halted production.
The AIM All-Shares index finished the week in a positive position, adding over 2% across the week in a slightly better performance than the FTSE 100.