The start of 2022 has seen SPAC mergers called off and the valuation of some deals lowered. On Thursday, a previously announced SPAC merger announced an increased valuation. Here's what investors need to know.
What Happened: Circle announced the termination of an existing merger agreement with Concord Acquisition Corp CND. The two parties announced a new merger that values the company at $9 billion, doubling the previous valuation of $4.5 billion.
“Circle’s rapid growth and world-class leadership are underscored by a regulatory-first mindset fixed on building trust and transparency in global markets,” Concord Acquisition Corp. Chairman Bob Diamond said.
“We believe our new deal is attractive because it preserves the ability of Concord’s public stakeholders to participate in a transaction with this great company.”
The two parties said they do not expect the existing deal to be completed by a termination date of April 3, 2022. The new deal has a termination date of Dec. 8, 2022, with the potential to extend the date.
The new company will trade under the ticker CRCL on the NYSE.
Related Link: How To Buy USD Coin
Why It’s Important: Circle is the issuer of USD Coin USDC/USD. The increased valuation comes as the market share of USDC rises.
“USDC’s circulation has more than doubled since the original deal was announced, reaching $52.5 billion as of February 16, 2022,” the press release reads.
Circle said its financial outlook and competitive position have improved since the original SPAC merger was announced.
The original SPAC presentation listed Circle's partners as Coinbase Global Inc COIN, Visa Inc V, FTX, Dapper Labs and US Bancorp USB.
“Being a public company will further strengthen trust and confidence in Circle and is a critical milestone as we continue our mission to build a more inclusive financial ecosystem,” Circle’s co-founder and CEO Jeremy Allaire said.
Circle and the SPAC taking the company public have been favorites of Ark Invest. CND is a position in both the Ark Next Generation Internet ETF ARKW and the Ark Fintech Innovation ETF ARKF.
CND is the 24th largest position in ARKW, valued at $32.9 million and representing 1.2% of assets. CND is the 33rd largest position in ARKF, with a $3.7 million stake representing 0.2% of assets.
ARKF bought 278,000 shares on Feb. 15.
Ark Invest was previously announced as a PIPE investor in the original SPAC merger announced in 2021.
CND Price Action: Concord Acquisition shares were trading down 3.62% at $10.12 midday Thursday.
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