Dive Brief:
- Circle, the cryptocurrency company that issues USD Coin (USDC), has delayed its initial public offering (IPO), and renegotiated its original agreement with special-purpose acquisition company (SPAC) Concord Acquisition to double Circle’s enterprise value from $4.5 billion to $9 billion, according to a Thursday press release.
- The July 2021 agreement between Circle and Concord originally established a termination date of April 3, 2022 for the deal. But that’s been pushed back until Dec. 8, and could potentially be delayed until Jan. 31, 2023, under certain conditions.
- Circle’s new enterprise value takes into account that circulation of USDC has more than doubled since the deal was first announced, the company said.
Dive Insight:
Circle, which issues the second-largest stablecoin by market capitalization, still plans to combine with Concord and eventually list on the New York Stock Exchange. But the SPAC merger is hanging fire "for a variety of reasons outside of the parties’ control," Circle said in its press release.
For one, the crypto firm pointed to its recent growth spurt. About $26 billion in USDC were circulating in July, CNBC reported. Circle said that figure has jumped to $52.5 billion as of Wednesday, according to the press release.
"We continue to believe that Circle is one of the most interesting, innovative and exciting companies in the evolution of global finance and we believe it will have an historic impact on the global economic system," said Concord's chairman, Bob Diamond, who once served as CEO of Barclays.
"Circle’s rapid growth and world-class leadership are underscored by a regulatory-first mindset fixed on building trust and transparency in global markets," Diamond said. "We believe our new deal is attractive because it preserves the ability of Concord’s public stakeholders to participate in a transaction with this great company."
Circle has filed an S-4 form with the Securities and Exchange Commission (SEC), which has yet to be declared effective by the regulator. The commission has ramped up its scrutiny of SPAC combinations in recent times, as the use of blank-check companies has grown more popular.
The new agreement allows Circle to raise $750 million in capital through private placements, based on a valuation of $7.65 million.
However, the new deal also eliminates $415 million in private investment in public equity from companies like Fidelity Management and ARK Investment.
The new agreement has been approved by the board of directors for both Concord and Circle.
"Circle has made massive strides toward transforming the global economic system through the power of digital currencies and the open internet," Circle CEO Jeremy Allaire said in the press release. "Being a public company will further strengthen trust and confidence in Circle and is a critical milestone as we continue our mission to build a more inclusive financial ecosystem.
"Making this journey with Concord under our new agreement is a strategic accelerator," Allaire added.
Circle was founded in 2013. A month after Circle announced its decision to merge with Concord, the crypto firm declared it would seek a charter to become a full-reserve national commercial bank.
