Merging company

Atlantic Coastal SPAC abandons merger with 3D printing company Essentium

Feb 11 (Reuters) – Blank check company Atlantic Coastal Acquisition Corp said on Friday its deal to take Essentium Inc public has been mutually terminated, highlighting problems in the industry which has recently seen cancellations of similar agreements.

The decision gives the Special Purpose Acquisition Company (SPAC) until March next year to seek another company to go public, with its CEO Shahraab Ahmad saying that SPAC will seek to merge with “companies of transformation” in the space of mobility.

The development comes days after telecommunications services company Syniverse Technologies and blank check M3-Brigade Acquisition II Corp (MBAC.N) also ended their merger agreement.

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Adverse market conditions amid inflation fears and impending rate hikes have weighed heavily on shares of some companies that have gone public through a SPAC merger, with rising shareholder buyouts worrying those looking to use the way forward.

Shares of Grab Holdings Ltd and BuzzFeed Inc (BZFD.O), which went public by merging with a SPAC, have fallen since listing last year and are down 11% to 17% in 2022 so far.

Atlantic Coastal and the 3D printing solutions provider did not provide a reason to terminate the agreement. As part of their termination agreement, SPAC will be entitled to receive cash payments or a warrant to acquire shares of Essentium at an implied value of $500 million, subject to certain conditions.

The merger deal, announced in December, would have valued the combined entity at $974 million and brought in $346 million in cash for Texas-based Essentium.

SPACs are shell companies that raise funds in an initial public offering (IPO) and place them in a trust with the intention of merging with a private company and taking it public.

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Reporting by Niket Nishant in Bengaluru; edited by Uttaresh.V

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