Payments and digital currency firm Circle and publicly traded special purpose acquisition company Concord Acquisition have signed a definitive agreement for business merger.
As per the terms of the agreement, a new Irish holding company will acquire both Concord and Circle and become a publicly-traded company, which is expected to trade on the New York stock exchange.
The deal, which is expected to close in Q4 2021, would take Circle’s enterprise value to $4.5bn.
Circle is claimed to be the principal operator of dollar digital currency, USD Coin (USDC), which has grown to over $25bn in circulation and has supported over $785bn in on-chain transactions.
Concord Acquisition Corp chairman and Atlas Merchant Capital CEO Bob Diamond said: “Circle is the true pioneer of trusted digital currencies, an increasingly critical part of the global financial system. The firm has earned its exceptionally strong reputation building highly innovative blockchain-enabled products and services within the regulatory perimeter. Circle’s world-class leadership team, its track record of delivery, and extraordinary ambition help position the firm as one of the most exciting companies in the transformation of finance.”
Circle co-founder and CEO Jeremy Allaire said: “Circle was founded with a mission to transform the global economic system through the power of digital currencies and the open internet. We’ve made huge strides towards realizing this vision, and through this strategic transaction and ultimate public debut, we are taking an even bigger step forward, with the capital and relationships needed to build a global-scale internet financial services company that can help businesses everywhere to connect into a more open, inclusive and effective global economic system. We are thrilled to partner with Concord’s executive and investment team, drawing on their decades of operating experience growing financial services businesses around the world.”
This merger is supported by $415m of capital commitments at $10 per share, and would see participation from institutional investors including Marshall Wace, Fidelity Management & Research Company, Adage Capital Management, accounts advised by ARK Investment Management and Third Point.
The transaction, which will include the contribution of up to $276m of cash held in Concord Acquisition Corp’s trust account, is expected to deliver up to $691m of gross proceeds to the merged entity.
Following completion of the deal, existing Circle shareholders will maintain around 86% ownership interest in the merged entity.
Present shareholders of Concord will also become shareholders of the merged entity and will exchange their shares of Concord common stock for equity of the combined firm on a share for share basis.
The deal has been unanimously approved by the board of directors of the two firms.
Completion of the deal is subject to approval by shareholders of Concord and Circle and other customary closing conditions, including regulatory approvals.