Prior to an increase to $9 billion in February 2022, the deal valued Circle at $4.5 billion in July 2021.
On December 5, Circle, the USDC's issuer, declared that its proposed merger with Concord Acquisition, an SPAC, had been mutually terminated. The agreement, which had an initial valuation of $4.5 billion when it was disclosed in July 2021, was later revised in February 2022 after Circle's valuation increased to $9 billion. At the moment, USDC is the second-largest stablecoin in use, with a $43 billion market valuation.
According to the agreements, Concord had until December 10 to complete the acquisition or ask shareholders for a vote to extend the deadline. It appears, though, that Concord opted to let the time restriction expire. According to Jeremy Allaire, CEO of Circle:
“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. We are disappointed the proposed transaction timed out; however, becoming a public company remains part of Circle’s core strategy to enhance trust and transparency, which has never been more important.”
Circle also reaffirmed that it turned a profit in the third quarter of 2022, with $274 million in total revenue and reserve interest income and $43 million in net income. At the moment, the corporation has $400 million in available cash.
The prolonged crypto winter has resulted in a downward spiral of modifications to many companies' values, even though the stakeholders did not directly address the cause of the deal's failure. SPAC acquisitions have additionally underperformed, with the benchmark IPOX SPAC index losing over 40% since hitting all-time highs in February 2021. Similar to this, in July 2018, Israeli cryptocurrency exchange eToro canceled its $10 billion SPAC merger following a decrease in valuation.
