At the SPAC of Dawn

With 282 SPACs holding pending deals or still searching for a target and 37 more on file, it’s hard to say that the SPAC boom has run its course, but there have been increasing signs that the cycle is beginning to come full circle as 2023 comes to an end.

The sentencing of Trevor Milton for four years of hard time for misleading investors at the beginning of the 2020 SPAC boom feels like one of those. SPAC litigation will surely not end with Nikola, but given that its combination kicked off the summer of “Deals with Wheels”, some closure with its long-running scandal would seem to put a pin in certain trends.

One might be saying the same thing once Digital World‘s (NASDAQ:DWAC) long-pending combination with Trump Media and Technology Group reaches some sort of conclusion. Its shareholders are set to vote again today, albeit on more technical issues concerning governance and auditor designations.

Nonetheless, there is a strange sense of asymmetry in watching Digital World continue to work diligently to unspool its massive PIPE from 2021, while Flame assembles the largest PIPE seen in a deal since December 2022 (detailed below and in a separate post to come).

Deals and Funding

• Flame Acquisition Corp. (NYSE:FLME) has expanded the PIPE for its combination with Sable Offshore to $180.4 million with investments by Metamorphic Pecan at $10 per share. Metamorphic will have a right to appoint a Board member presuming it maintains at least a 10% stake and Flame intends to continue to expand to the PIPE to up to $525 million.

News and Rumors

• Reuters: Trevor Milton, founder and former CEO of Nikola Corp. (NASDAQ:NKLA), which combined with VectoIQ Acquisition Corp. in 2020, was sentenced to four years behind bars for lying to investors about the electric-truck maker’s technology in its de-SPAC process.
• Vertical Magazine: eVTOL developer Archer (NYSE:ACHR) has teamed up with its Wisk Air on autonomy applications, setting aside two years of lawsuits between the two firms over intellectual property theft claims. The US Air Force also recently ordered six aircraft from Archer for $142 million, two years on from its combination with Atlas Crest in September 2021.
• PR: African Agriculture (NASDAQ:AAGR) added private equity and SPAC veteran Osman Ahmed to its Board two weeks after closing its combination with 10X Capital II. Ahmed currently serves as managing director and head of private equity at 10X Capital and previously served as CEO of Founder SPAC, which combined with Rubicon Technology (NYSE:RBT) in 2022.

Scheduling Notes