At the SPAC of Dawn

Good morning! Watch this space moving forward as a roundup of evening filings as well as news nuggets to nibble on beside your morning coffee.

Sometimes the best deals are those that you don’t do. For SPACs that appears to be the case with the logistics technology space in general.

Last week brought news that trucking disruptor Convoy was shutting down just 18 months after achieving a $3.8 billion valuation in a private raise. Convoy was among a host of companies vying to break into the freight and logistics spaces the same way ride-hailing companies took over the taxi world, and for a time it appeared to be a sector that was destined to be fertile ground for SPAC deals.

But, in the end few deals were made.

Gesher I‘s 2022 combination with digital freight marketplace Freightos (NASDAQ:CRGO) wound up as the sole sector deal closed since 2017 and it has traded not far off the median SPAC performance, last closing at $2.20. But several other SPACs tried their hand at the space.

G Squared Ascend I announced a $1.1 billion deal with digital freight platform Transfix in 2021, but later terminated it about a year later despite having secured amendments to the transaction. Evo similarly launched a $338 million combination with Singaporean logistics software company 20Cube in 2022 but canceled it in April. Both SPACs later liquidated.

For logistics technology companies in general, they have fallen on hard times having entered their sector flush with venture capital and ambition. Supply chain challenges during the pandemic seemed to confirm that this massive $875 billion industry was ripe for innovation.

But, the sector proved a tough nut to crack. It certainly has inefficiencies to shake loose, but as these tech-heavy firms discovered, many of those are both difficult and expensive to change. Not only that, but freight demand has been steadily decreasing since the pandemic as shoppers took a break from online shopping and the industry’s customers in retail discovered efficiencies of their own that decreased demand.

It is yet to be seen whether the “freight recession” will presage a general recession, but there are plenty of signs that SPACs may have dodged a major pothole in the road with this sector in general.

Deal Amendments and New Funding

• Worldwide Webb (NASDAQ:WWAC) has amended its combination with Aeries Technology to include a $3 million PIPE for 620,000 shares ($4.84 per share) and has modified the deal’s lock-up such that only 80% rather than 100% of the sponsor’s promote will be subject to trading restrictions for 150 days.
• Nova Vision (NASDAQ:NOVV) has reduced the share compensation to its merger partner Real Messenger to 5,000,000 shares at close from 6,000,000. Of these, 500,000 shares are to go to convertible note holders. The deal’s outside date was also moved to December 31, 2023.
• Sizzle (NASDAQ:SZZL) and Critical Metals Corp. entered into a binding term sheet with Vellar Opportunities Fund Master with respect to a potential investment by the investor in Sizzle’s common stock and/or ordinary shares of up to 20,000,000 shares. The primary purpose of is to provide cash to the combined company following the closing of the deal.

News and Rumors

• NYT: Buzzfeed (NASDAQ:BZFD), which combined with 890 5th Avenue in December 2021, is working to sell off its its Complex Networks media subsidiary for about $140 million as it manages its debt load.
• Yahoo Finance: Apex Fintech Solutions is considering reviving plans to go public through a traditional IPO after terminating its deal with Northern Star Investment Corp. II (NYSE:NSTB) in December 2021.

Non-Redemption Agreements

• Cactus Acquisition Corp. 1 Limited (NASDAQ:CCTS) and its sponsor entered into non-redemption agreements with several unaffiliated third parties. The non-redeeming shareholders agreed not to redeem an aggregate of 1,999,900 publicly-held Class A ordinary shares. In exchange, the sponsor will transfer an aggregate of 199,990 founder shares to the shareholders immediately following the completion of a deal.
• TG Venture Acquisition Corp. (NASDAQ:TGVC) and its sponsor entered into an agreement with Bulldog Investors and Phillip Goldstein. The agreement provides for, among other things, the sponsor to pay up to an aggregate of $369,002 to the investors in exchange for the investors agreeing to hold and to not redeem certain shares of common stock.

Scheduling Notes

• CONX Corp. (NASDAQ:CONX) postponed its extension meeting, which was originally scheduled to be held at 10:00 a.m., Mountain time, on November 1, and will now hold the meeting at 10:00 a.m., Mountain time, November 3.