Atlantic Coastal Acquisition Corporation, the blank-check firm, that had entered into a definitive business merger agreement with Essentium, Inc., a leading innovator of industrial additive manufacturing solutions, announced that the IPO deal with Essentium has been mutually terminated citing troubles for the 3D printing sector.
The merger deal, announced in December, would have valued the combined entity at $974 million and fetched $346 million in cash for Texas-based Essentium.
SPAC terminates IPO Deal with Essentium
Atlantic Coastal and the 3D printing solutions provider did not give a reason for terminating the IPO deal with Essentium. As part of their termination agreement, the parties agreed that if Essentium is not sold on or before March 8, 2023, Essentium will deliver a warrant to Atlantic Coastal to acquire a stake equal to 5% of Essentium at an implied valuation of $500M.
“We wish Essentium well in their endeavors. Atlantic Coastal will focus its efforts on identifying transformational companies within the mobility space as we look toward maximizing value for shareholders through our next proposed business combination.”
– Shahraab Ahmad, Chairman and Chief Executive Officer of Atlantic Coastal
The termination of the deal comes at a time when there is a drop in favour for SPAC mergers. The market conditions have made SPAC deals less popular. This can be one of the major reasons for the cancellation of the deal.
“We appreciate the Atlantic Coastal team’s support and guidance throughout this process, and we are disappointed that market conditions prevented the parties from consummating this agreement. We will continue to leverage the strength of our additive manufacturing technology and product system validated by the Department of Defense to continue to advance additive manufacturing globally.”
– Blake Teipel, Chief Executive Officer of Essentium
The decision gives the special purpose acquisition company (SPAC) until March of next year to find another company to take public, with CEO Shahraab Ahmad stating that the SPAC will look to merge with “transformational companies” in the mobility space.
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