Ace Convergence in an 8-K filing today disclosed that PIPE investor Oaktree has terminated a $175 million investment in the SPAC. The funds were expected to support the proposed merger of Ace Convergence and Tempo Automation. Tempo is a software-accelerated electronics manufacturer.
As a result of the termination, if ACE completes the deal with Tempo Automation, Oaktree will be entitled to a termination fee of 3.5% of the aggregate principal amount, to be paid by ACE immediately following and as a condition subsequent to the closing of the business combination.
ACE sought a deadline extension in June and last month announced 2 million incentive shares available to PIPE investors who stayed in the deal. A vote on the merger was postponed in May.
The Ace trust is down to about $40 million in the wake of redemptions following two extension votes. The SPAC still has a $25 million PIPE from a sponsor affiliate, as well as a $100 million commitment from Cantor Fitzgerald to purchase shares following the Tempo deal closing.
The deal with Tempo has a minimum cash condition of $320 million.
At announcement, the deal had a $919 million estimated post-transaction equity value.
News of the PIPE termination comes on the heels of yesterday’s announcement that Tempo’s planned acquisition of Compass AC Holdings had been terminated. While that acquisition was a condition of the Ace-Tempo deal, the parties said they would continue to pursue their own merger regardless. Meanwhile, Tempo also intends to acquire Whizz, a provider of electronics product design, development and manufacturing services, privately held and based in San Jose, CA. Read more.
