Circle Internet Financial announced today that it has terminated its existing business combination and agreed to new transaction terms with Concord Acquisition that increases the implied valuation to $9 billion — up from the previous $4.5 billion when the deal was announced last July.
Circle is a global internet finance firm that provides internet-based payments and financial infrastructure and is the issuer of USD Coin.
The increase in value reflects improvements in Circle’s financial outlook and competitive position – particularly the growth and market share of USDC, one of the fastest growing dollar digital currencies, Circle said in a news release USDC’s circulation has more than doubled since the original deal was announced, reaching $52.5 billion as of yesterday.
This is the first revised SPAC deal in at least a year where the target’s valuation increased. Revised valuations on SPAC deals have typically gone in the opposite direction.
Under terms of the new agreement, the holding company that was set up for the original business combination will acquire both Concord and Circle and become publicly traded business on the NYSE under the symbol CRCL. The new deal replaces the prior agreement, which for a variety of reasons outside of the parties’ control could not be completed by the termination date of April 3, Circle said.
The original deal terms called for a $415 million PIPE with participation from institutional investors including Marshall Wace, Fidelity Management & Research, Adage Capital Management, accounts advised by ARK Investment Management and Third Point. Including the contribution of up to $276 million of cash held in Concord Acquisition’s trust account (assuming no redemptions), the original deal was expected to deliver up to $691 million of gross proceeds to the combined company.
The new agreement has an initial outside completion date of Dec. 8, with the potential to extend the deadline to Jan. 31, 2023. Read more.
