Circle, a blockchain based payment systems group based in Boston, unveiled plans Thursday to list on the New York Stock Exchange through a $4.5 billion SPAC merger with an acquisition group lead by former Barclays CEO Bob Diamond.
Concord Acquisition Corp., as well as a newly-created holding company based in Ireland, will buy Circle for around $691 million, including $415 million in "capital commitments" from a group of institutional investors that includes 'accounts advised by ARK Investment Management LLC and Third Point."
Circle shareholders will retain around 86% of the combined group, which will have an enterprise value of around $4.5 billion. It will list on the NYSE under the ticker symbol CRCL and will be headed by current CEO Jeremy Allaire.
"Circle is the true pioneer of trusted digital currencies, an increasingly critical part of the global financial system. The firm has earned its exceptionally strong reputation building highly innovative blockchain-enabled products and services within the regulatory perimeter," Diamond said. "Circle's world-class leadership team, its track record of delivery, and extraordinary ambition help position the firm as one of the most exciting companies in the transformation of finance."
Concord Acquisition Corp shares were marked 6.2% higher in pre-market trading Thursday following news of the transaction to indicate an opening bell price of $10.50 each.
SPACs are essentially shell corporations that raise money from investors, list on a stock exchange and then target a company for acquisition that is eventually merged into the existing listing. More than 330 SPACs have raised $105 billion so far this year -- compared to $83.4 billion over the whole of 2020 -- with another 200 waiting in the wings to add another $58 billion to the growing total.
However, the trend has also raised significant concerns from market watchdogs and consumer and investor advocates, who worry that the rush to market has come at the cost of sufficient due diligence of the black-check vehicles.
The IPOX SPAC index, a benchmark for performance in the blank-check market, is up more than 42% over the past year, but have fallen some 24% from its February 17 peak amid a series of under-performing SPAC debuts and growing concerns over the lack of viable targets for the now 700-plus groups that are listed.