The SPAC trend has come to the blockchain industry. Circle Internet Financial Inc. announced early Thursday it has agreed to be acquired by Concord Acquisition Corp., a special purpose acquisition company, in a deal that will take Circle public and values the 8-year-old company at $4.5 billion.
That valuation would make the deal the second-largest SPAC takeover in the payments business so far, exceeded only by the recent $9-billion SPAC arrangement completed by the big payments processor Paysafe Holdings Ltd.
In SPAC transactions, companies convert to public ownership by undergoing an acquisition by so-called blank-check companies, publicly listed entities created for the sole purpose of acquiring privately held companies. The special purpose acquisition companies then dissolve after the deal closes. In the deal for Circle, which is expected to close in the fourth quarter, both the company and Concord will be merged with a holding company based in Ireland. Upon the close, the new entity will trade on the New York Stock Exchange under the symbol CRCL.
With public ownership, Boston-based Circle clearly expects to achieve the financial heft it needs to expand more rapidly in blockchain payments and finance. “Circle was founded with a mission to transform the global economic system through the power of digital currencies and the open Internet,” said Circle co-founder and chief executive Jeremy Allaire, in a statement. “We’ve made huge strides towards realizing this vision, and through this strategic transaction and ultimate public debut, we are taking an even bigger step forward, with the capital and relationships needed to build a global-scale Internet financial services company.”
Boston-based Circle is known particularly as a processor for USD Coin, a so-called stablecoin tied to the value of the U.S. dollar. Some $25 billion worth of the coin is in circulation, and it has supported some $785 billion in blockchain transactions since its launch in 2018, according to figures from Circle.
On completion of the merger, current Circle shareholders will own approximately 86% of the new entity, according to information released Thursday. Circle expects to use the funds from the transaction to support product development.
Concord, whose initial public offering in December raised some $276 million, is listed on the NYSE under the symbol CND.
SPAC combinations across all industries have assumed a prominent role in IPOs this year, with the total value raised reaching $112.6 billion on 365 deals so far, according to spacresearch.com. That value is already up 35% over all of last year, while the number of deals has jumped 47%, with nearly half the year remaining.