Khosla Ventures (NASDAQ:KVSA) and Stratim Cloud (NASDAQ:SCAQ) each announced non-binding letters of intent with potential combination targets and provided varying levels of information along with the news.
Stratim Cloud at least named its target as Force Pressure Control, an energy firm that provides tools and services for fracking natural gas wells. But, on the “clean energy” side, it notes this equipment can also be used to dig out sustainable geothermal wells.
The deal as currently laid out would see Stratim Cloud acquire 100% of Force Pressure Control in exchange for 12,000,000 newly-issued shares and $120 million in cash and notes. This is notably much less cash than the roughly $253 million Stratim Cloud currently has in trust.
But, it will need to extend its transaction deadline at least once from its current date on March 16 to bring the deal to close. SPACs that have held votes so far in 2023, but have not yet completed transactions have seen an average of 78.5% of shares redeemed. Stratim Cloud has this deal under mutual exclusivity until March 14.
Khosla, meanwhile, was less forthcoming about its potential combination, providing neither a name nor a description of the target in an 8-K filing. But, it doesn’t need to publicize those details to secure its own extension, as it may automatically extend by three additional months if it has signed an LOI or firmer merger agreement. As such, it now gets to automatically move its deadline from March 8 to June 8
Since both of these announcements are only at the LOI stage, these SPAC’s will remain in SPACInsider’s “Searching” category until a definitive agreement is signed.
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