Atlantic Coastal Acquisition Corp. (NASDAQ: ACAH), the company set to merge with Essentium, Inc. to establish an IPO, has backed out of its deal. The mobility-focused special purpose acquisition corporation (SPAC) has terminated its agreement with the 3D printer manufacturer, with mutual agreement. Atlantic Coastal will, in turn, look for a different firm with which to merge.
Shahraab Ahmad, Chairman and Chief Executive Officer of Atlantic Coastal, said, “We wish Essentium well in their endeavors. Atlantic Coastal will focus its efforts on identifying transformational companies within the mobility space as we look toward maximizing value for shareholders through our next proposed business combination.”
Blake Teipel, Chief Executive Officer of Essentium, said, “We appreciate the Atlantic Coastal team’s support and guidance throughout this process, and we are disappointed that market conditions prevented the parties from consummating this agreement. We will continue to leverage the strength of our additive manufacturing technology and product system validated by the Department of Defense to continue to advance additive manufacturing globally.”
While the deal is terminated, the businesses have come to an agreement that will grant Atlantic Coastal the right to receive future payments related to Essenitum’s financing or sale. A press release noted:
“In connection with the agreement to terminate, the parties have agreed that Atlantic Coastal will be granted the right to receive payments in the future, subject to certain circumstances relating to the consummation of future financing transactions by Essentium, a sale of Essentium, or Atlantic Coastal’s inability to consummate a business combination transaction. The parties have also agreed that, in the event a sale of Essentium does not occur on or prior to March 8, 2023, Essentium shall deliver a warrant to Atlantic Coastal providing for the ability of Atlantic Coastal (or its successors or assigns) to acquire a stake equal to five percent of Essentium at an implied valuation equal to $500,000,000.”
The cancellation of the deal comes at a time in which SPAC mergers are starting to lose favor. Perhaps, it was this that led to the termination, as the two parties may not have been able to achieve as successful an IPO as would have been possible last year, when a number of 3D printing startups performed SPAC mergers.
We’ve reached out to Essentium for a quote and will update the article when we hear more. We can guess that a SPAC IPO is not out of the question. It is possible that, when market conditions change or Essentium finds another partner, a public listing could go through. Hopefully this doesn’t slow down the startup’s metal 3D printing technology by too much.
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