Craig Clay: Yeah, sure. This Craig Clay, I’ll start. SPAC IPOs have historically made up a small percentage of our transactional revenue. The bigger opportunity, as we noted in the past is the De SPAC. So Q4 had 71 SPAC announce their business combinations, it was the most active quarter in 2022. There were 25 in December alone. So as you referenced about 350 SPACs were obtained for their business combination. According to deal logic, these SPACs or valuing companies are seeking to take private at their lowest level since the boom began. So last year, the merger valuation fell to about 200 million from 2 billion. So what this shows is a reset in valuation, but also a progress in the market digesting that SPAC peaked. And certainly, as you referenced, De SPAC performance has been challenged.
So of the SPAC that completed last year, only 10% were trading at $10 and higher. And this poor market performance did cause a lot of scrutiny, it did have certainly the largest number of redemptions. So Q4 had 96%, which was the worst on record. But when you roll all that together, what you have is some quality deal teams that are still there, that are still looking, and we’re optimistic that SPAC are going to continue to find their place in the capital market albeit at a lower level than we saw.
Peter Heckmann: Okay. Alright
Dave Gardella: The one thing I would add there is, as it relates to the compliance business specific on AD, we did see obviously in 2021, a lot of the SPACs coming onto the platform. And then with some of the liquidations in 2022, and lack of IPO in 2022, our growth rate in AD was really moving up nicely. In 2021 obviously it started to slow and 2022, because of that impact, in addition to, as Dan mentioned earlier, is transitioning the remainder of clients off of AD3. And so, we’ll expect to see that continuing to kind of softer trend in the first half of the year as everything kind of resets and then improving starting in the back half.
Peter Heckmann: Can you maybe provide some additional on the IPO side, for the reasons you know to well, 2022 slowest year for IPO proceeds in 30 years, and it was dominated by real small deals. There were only 16 offerings in the full year that were greater than 100 million. That’s the lowest in over 20 years. We’re happy that we worked with 16 of those 20 largest deals. And what our clients are telling us right now is that we may see a few highly selective IPOs in the first half but that can lead to a broader IPO issuance in the second half. And as you’ve previously commented, you’re encouraged by the pipeline or in process yields, and that pent up demand for future transactions. We have a little tailwind with the new regulatory approval for direct listings without being limited to the price restriction.
So this yet unused alternative could have a positive for the market. And it’s the same amount of work for DFIN. So given all these steps our clients are taking to remain ready to go public, we know that they’ll respond quickly when that market opens.
Peter Heckmann: Great, thanks.
Operator: We’ll take our next question from Raj Sharma at B. Riley Securities.
