G Squared Ascend I Inc. (NYSE:GSQD) announced this morning that it has mutually terminated its combination with digital freight software company Transfix and its sponsor will instead invest in the company privately.
The parties blamed “current public market conditions” for nixing the deal, which was announced over a year ago in September 2021. While the parties had not yet set a date for a completion vote, G Squared may have struggled to hit the deal’s $200 million minimum cash condition in this redemptions climate despite having a $60 million forward-purchase agreement and $50 million backstop.
But with the changing market appetites, this could have also simply been a case of the two sides unable to come together on a re-strike. Transfix grew revenue at a CAGR of 81% from 2016 to 2020, but at the time of the deal’s announcement, it did not expect to be EBITDA positive until 2024E. As such, it may have had to wait for a while before a market focused on cash generation would give it its due.
This could still wind up as a missed opportunity, however. The terms of Transfix’s pending private round with G Squared and fellow existing investor New Enterprise Associates have not been made public yet, but it seems likely that it will be at a valuation below the $1.05 billion envisaged in this deal.
In a similar scenario, ticket marketplace company Seat Geek terminated its combination with RedBall in June, which would have valued it at $2.0 billion pro forma equity value with $100 million in committed capital from a combination of a private placement and PIPE. SeatGeek then turned around and raised $238 million in a private Series E at a valuation at $1 billion pre-money.
Should either company seek to go public again, it will have been after one more round of dilution and possibly on less favorable terms than they had in hand. G Squared, meanwhile, will be gaining an increased share in Transfix in either scenario, but its SPAC is now in a less favorable position coming up on a February 9, 2023 transaction deadline in what may still be a difficult market to extend with low redemptions.
Four Leaf Acquisition Corporation (NASDAQ:FORL) has entered into a definitive agreement to combine with Chinese technology firm Xiaoyu Dida for undisclosed terms. The Guangzhou, China-based firm produces software and hardware for smart car washing systems. The parties have set December 31, 2025 as the initial outside date and the combined company is expected to trade...
At the SPAC of Dawn SPACs are back on the board with a new deal announcement, which is the first in a little over two weeks. This brings the fourth quarter count on fresh deals to a still-meager nine after 27 were announced in the third quarter. By contrast, this quarter has still seen more...
Range Capital Acquisition Corp. (NASDAQ: RANGU) announced the pricing of its $100 million IPO and its units are expected to begin trading on the Nasdaq under the symbol “RANGU”, Friday, December 20, 2024. The new SPAC intends to take a generalist approach in searching for a business combination, but will seek opportunities in capital constrained...
SPAC Deja Vu There’s been a lot of talk this year in the SPAC market about how it’s finally reverting back to a healthier version of deal flow and the comparison is always, “….like 2019”. In fact, in 2019, Trump was in office and there were 59 SPAC IPOs priced. As of this morning, Trump...
This year has seen a variety of innovations for SPACs to continue the lifespan beyond their traditional search windows. In general, this creativity is welcome as long as investors get their chance to have a say and a redemption opportunity at the appropriate time. But, in the second half of 2024, some SPACs have not...