Stablecoin Issuer Circle Terminates Proposed $9 Billion SPAC Merger With Concord

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Key Takeaways

  • The deal made in 2021 previously valued Circle at $4.5 billion and was later amended in February 2022 to $9 Billion.
  • Circle reported a net income of $43 million and $400 million in cash in the third quarter.

Stablecoin issuer Circle has terminated its proposed merger with a special purpose acquisition company (SPAC), Concord Acquisition. A SPAC is a publicly traded company created to acquire or merge with an existing company.

In an official statement, Circle CEO Jeremy Allaire stated that they were disappointed the proposed transaction timed out while adding that “becoming a public company remains part of Circle’s core strategy to enhance trust and transparency, which has never been more important.”  

 “Concord has been a strong partner and has added value throughout this process, and we will continue to benefit from the advice and support of Bob Diamond and the broader Concord team,” Jeremy said.

The deal was announced in the middle of the bull market in July 2021 and was later amended to double Circle’s valuation in February 2022 to $9 billion.  When it was first announced in mid-2021, Circle’s deal with Concord was anticipated to close in Q4 2021.

Under the terms of the proposed deal, Concord had until Dec. 10 to finalize the transaction or seek a shareholder vote for an extension. However, Concord resorted to having the time limit lapse instead. 

In its official announcement, Circle claims its profitable, posting total revenue, including interest on its reserves, of $274 million and net income of around $43 million in the third quarter of 2022 while adding that it also had $400 million in unrestricted cash supplies.

In July 2021, a company presentation on the SPAC deal listed an expected USDC circulation of $190 billion by 2023. According to Coinmarketcap, USD is currently the second largest stablecoin in circulation and has a circulating supply of $43 billion.

The ongoing crypto winter has cast a shadow over proposed SPAC deals. The SPAC market had offered investors only disappointment last quarter. In April this year, the IPOX Spac Index fell 9.5%, the worst performance since its July 2020 launch. In August, Blank-check vehicle 10X Capital Venture Acquisition Corp II said it mutually ended a $1.25 billion merger deal with cryptocurrency mining company Prime Blockchain.

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Saniya Raahath
Saniya Raahath

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