Circle, which provides payments infrastructure for digital currencies, said on Thursday it would go public in a blank-check merger deal that values it at $4.5 billion, at a time crypto firms are battling increased regulatory scrutiny.
Circle will merge with Concord Acquisition Corp (CND.N), which is backed by former Barclays boss (BARC.L) Bob Diamond, and the combined entity will be acquired by a new Irish holding company that will trade on the New York Stock Exchange.
The announcement comes months after a federal court in Massachusetts authorized the Internal Revenue Service to serve summons to Circle, seeking information about U.S. taxpayers who conducted transactions of at least $20,000 in cryptocurrency during 2016 to 2020. Circle has not been accused of any wrongdoing. (https://bit.ly/36lH1bL)
The company has said it is the principal operator of USD Coin, a cryptocurrency whose value is pegged to the U.S. dollar. The digital currency space has witnessed a soured investor sentiment in recent months after an initial euphoria that took it to record highs earlier this year.
The deal is expected to fetch $691 million in proceeds for the combined entity, the Boston-based startup said.
Special purpose acquisition companies (SPACs) are shell companies that raise funds through initial public offerings to take private companies public through mergers at a later date.
Institutional investors Marshall Wace, Fidelity Management & Research Co, Daniel Loebb’s Third Point and accounts advised by ARK Investment Management have agreed to offer $415 million in PIPE (private investment in public equity) financing, Circle said.
The deal marks a rebound in activity for SPACs after Wall Street appetite showed signs of waning and regulators clamped down on such offerings, following a period of frenetic dealmaking using the investment vehicle.
After the merger, Circle will start trading under the ticker symbol “CRCL.”