Digital trucking platform Transfix Inc. and its special purpose acquisition company G Squared Ascend I Inc. said they have postponed their merger date by six months to Nov. 3 due to an unfavorable climate for SPAC transactions.
The original May 3 merger date was pushed back due to suboptimal market conditions, G Squared (NYSE: GSQD) said in a statement posted earlier this week on Transfix’s website. “We remain hopeful that better market conditions inclusive of a reopening of new issuance will emerge in the months ahead,” said G Squared CEO Ward Davis.
The SPAC listing had set a $1.1 billion valuation on the startup.
As part of the revamped timeline, funds affiliated with G Squared will provide $50 million of guaranteed financing to Transfix on or before Sept. 30, the companies said. Transfix will also receive an additional $50 million in cash, bumping the committed capital amount to $200 million, whether the proposed merger closes or not, according to the statement.
“We remain optimistic about the prospect of becoming a public company and excited about the many ways Transfix continues to transform the highly fragmented transportation and logistics sector with significant capital to fund our growth plan,” said Lily Shen, Transfix’s president and CEO.
SPACs caught fire in the past couple of years as a means for companies to go public without going through the traditional and often arduous initial public offering process. Also known as a blank check company, a SPAC is a shell corporation that is publicly listed for the purpose of acquiring a private company. According to Securities and Exchange Commission documents, 613 SPACs were started in 2021 with gross proceeds of $162.5 billion.
However, some transportation SPACs have blown up over allegations of financial improprieties. The most recent was EV manufacturer Electric Last Mile Solutions (ELMS), which went public less than a year ago but filed for bankruptcy under Chapter 7 this month. Its two top executives resigned over allegations they purchased stock at deeply discounted prices prior to ELMS’ SPAC agreement being finalized.
Source: freightwaves - Transfix, SPAC partner postpone merger until November
Editor: Mark Solomon