Fortress Value Acquisition III and IV seek shareholder approval to redeem outstanding stock prior to Dec. 31. FVIV expires on March 18, 2023.
Management for both SPACs in a press release said closing a deal on a suitable merger “is highly improbable,” and because redemptions made after Dec. 31 may be subject to a 1% excise tax included as part of the Inflation Reduction Act of 2022, it’s in shareholders’ best interest to return the cash in trust within calendar 2022.
Fortress III management since the SPAC’s $200 million IPO in January 2021 evaluated nearly 60 targets, according to a press release.
With both SPACs, Fortress management cited an inability to reach an agreement with potential merger partners on valuation. Other factors getting in the way of a suitable deal included preliminary assessments of a target company’s business model, customer concentration, competitive landscape and corresponding risks to future performance, assessments of a target company’s ability to execute on its plans and scale the business, and alternative options available to potential targets, such as pursuing a traditional initial public offering or waiting for the capital markets to improve.
Since Fortress IV raised $600 million in a March 2021 IPO, management said it has reviewed more than 50 potential targets in multiple industries.
The SPACs had planned to focus on underperforming companies that could benefit from management’s expertise. Read more.
