USD Coin (USDC) Circle issuer introduced the mutual termination of its proposed merger with Particular Objective Acquisition Firm, or SPAC, Harmony Acquisition, in response to a brand new press launch issued Dec. 5. The deal was introduced in July 2021 with a preliminary valuation of $4.5 billion and was amended in February 2022 when Circle's valuation rose to $9 billion. USDC is at present the second largest stablecoin in circulation with a market cap of $43 billion.
Below the phrases of the agreements, Harmony had till December 10 to shut the transaction or request a shareholder vote for an extension. Nonetheless, it seems that Harmony has opted to let the deadline cross as an alternative. As said from Circle CEO Jeremy Allaire:
“Harmony has been a robust companion and added worth all through this course of and we are going to proceed to profit from the recommendation and help of Bob Diamond and the broader Harmony group. We're upset that the proposed transaction has expired, nevertheless turning into a public firm stays a part of Circle's core technique of fostering belief and transparency, which has by no means been extra necessary."
Circle additional affirmed that it "turned worthwhile within the third quarter of 2022, with complete income and reserve curiosity revenue of $274 million and web revenue of $43 million." The corporate at present has $400 million in unrestricted money.
Whereas stakeholders didn't immediately state the rationale behind the deal's fallout, the continued crypto winter has led to a spiral of downward revisions to many firms' valuations. Moreover, SPAC mergers have additionally carried out poorly, with the IPOX SPAC Benchmark Index down over 40% since hitting all-time highs in February 2021. Likewise, Israeli cryptocurrency change eToro ended its $10 billion SPAC merger in July following a downward revision to its valuation.
