Three Houston SPACs announce plans to dissolve

Last week three Houston SPACS (Special Purpose Acquisition Companies) announced plans to dissolve and return the monies raised during their IPOs to the shareholders.

Good Works Acquisition Corp II (GWII) will redeem all its shares, effective as of the close of business on March 16, 2023.  The announcement came one day after the collapse of its $723 million deal to take Direct Biologics, an Austin biotech company, public.  No reason was given for the collapse.

GWII went public in July 2021 in a $230 million IPO and had 15 months to complete a transaction.

The first Good Works SPAC took Cipher Mining public in August 2021 in a $2 billion transaction. The stock of the bitcoin miner is down 85% since going public.

Peridot Acquisition Corp II will redeem all its shares, effective March 13, 2023. In March 2021, it raised $360 million, seeking acquisitions in the environmental or recycling space.

The first Peridot SPAC took Li-Cycle public in August 2021 in a $975 million transaction. The stock of the company, which is a Lithium-ion battery recycler, is down about 45% since the deal.

ESM Acquisition Corp also went public in March 2021 in a $300 million IPO. It was looking for acquisitions of companies that mine commodities that are critical in order to achieve de-carbonization. The company will redeem its shares on March 12.

SPACS generally have two years from going public to complete a deal, though that time period can be extended with a shareholder vote. The exact terms are governed by the Articles of Association of each company.

After these three companies dissolve, there will still be 11 Houston-areas SPACs. A few have announced deals that haven’t yet closed. Some of the others are obtaining shareholder votes for extensions. For example Mercury Ecommerce (now called SEP Acquisition Corp) now has 36 months from its $175 million IPO in July 2021 to complete a deal.

SEC filing – Good Works Acquisition Corp II

SEC filing – Peridot Acquisition Corp II

SEC filing – ESM Acquisition Corp

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