Software firm Corcentric and blank-check firm North Mountain Merger Corp (NMMC.O) said on Monday they would terminate their $1.2-billion merger deal, in yet another sign that the SPAC boom has fizzled out.
Special purpose acquisition companies (SPACs) offer an alternate route to list shares and gained popularity in 2020, but have seen a decline in interest with several companies abandoning deals, higher investor redemptions and tightening regulatory scrutiny since last year.
The De-SPAC Index (.DESPACTR), which tracks the performance of 25 companies that went public after merging with SPACs, is down nearly 60% so far this year.
The Corcentric announcement also comes at a time when volatility in the U.S. market has spiked, triggered by the Russia-Ukraine conflict and interest rate-hike concerns. The merger first announced late last year was expected to close in the second quarter of 2022.
Earlier this year, FinAccel, the parent of buy now, pay later platform Kredivo, also scrapped its $2.5-billion blank-check deal citing adverse market conditions.
SPACs are companies that are listed on exchanges but have no business operations. They use funds raised through initial public offerings to merge with privately held companies, in turn taking them public.