Circle, a global financial technology firm that provides payments and treasury infrastructure for internet businesses, announced today that it has entered into a definitive business combination agreement with Concord Acquisition Corp (“Concord“) (NYSE: CND), a publicly traded special purpose acquisition company. Under the terms of the agreement, a new Irish holding company (the “Company”) will acquire both Concord and Circle and become a publicly-traded company, expected to trade on the NYSE under the symbol “CRCL”. The transaction values Circle at an enterprise value of $4.5 billion.
Circle’s mission of raising global economic prosperity through the frictionless exchange of financial value is being met through a series of internet-native, digital currency powered, transaction and treasury services that help businesses and financial institutions globally to take advantage of the shift to a digital currency and blockchain powered global financial system. Circle is the principal operator of the fastest growing dollar digital currency, USD Coin (USDC), which has grown to more than $25 billion in circulation and has supported more than $785 billion in on-chain transactions. In 2021, USDC in circulation has grown in excess of 3400%, fueling a broadening array of use cases for high-trust, low-friction internet-native payments and settlements.
Bob Diamond, Chairman of Concord Acquisition Corp and CEO of Atlas Merchant Capital, noted “Circle is the true pioneer of trusted digital currencies, an increasingly critical part of the global financial system. The firm has earned its exceptionally strong reputation building highly innovative blockchain-enabled products and services within the regulatory perimeter. Circle’s world-class leadership team, its track record of delivery, and extraordinary ambition help position the firm as one of the most exciting companies in the transformation of finance.”
Jeremy Allaire, Circle’s co-founder and CEO commented “Circle was founded with a mission to transform the global economic system through the power of digital currencies and the open internet. We’ve made huge strides towards realizing this vision, and through this strategic transaction and ultimate public debut, we are taking an even bigger step forward, with the capital and relationships needed to build a global-scale internet financial services company that can help businesses everywhere to connect into a more open, inclusive and effective global economic system. We are thrilled to partner with Concord’s executive and investment team, drawing on their decades of operating experience growing financial services businesses around the world.”
The business combination is supported by $415 million of capital commitments at $10.00 per share, with participation from top-tier institutional investors including Marshall Wace LLP, Fidelity Management & Research Company LLC, Adage Capital Management LP, accounts advised by ARK Investment Management LLC (“ARK”) and Third Point. Including the contribution of up to $276 million of cash held in Concord Acquisition Corp’s trust account (assuming no redemptions), the transaction is expected to deliver up to $691 million of gross proceeds to the combined company.
Upon consummation of the transaction, existing Circle shareholders will maintain approximately 86% ownership interest in the combined company. Proceeds of the transaction will support Circle’s continued growth through ongoing product development in close collaboration with its initial customers. Existing Circle equity holders have the potential to receive an earnout of additional shares of the Company, if certain stock price targets are met as set forth in the definitive business combination agreement. Current shareholders of Concord will also become shareholders of the Company and will exchange their shares of Concord common stock for equity of the Company on a share for share basis.
The transaction, which has been unanimously approved by the board of directors of both Concord Acquisition Corp and Circle, and is expected to close in the fourth quarter of 2021, is subject to approval by shareholders of Concord and Circle and other customary closing conditions, including any applicable regulatory approvals.
Additional information about the transaction will be provided in a Current Report on Form 8-K that will contain an investor presentation to be filed with the Securities and Exchange Commission (“SEC”) and available at www.sec.gov. In addition, the Company intends to file a registration statement on Form S-4 with the SEC, which will include a proxy statement/prospectus of Concord, and will file other documents regarding the proposed transaction with the SEC.
Goldman Sachs & Co. LLC is serving as the exclusive financial advisor to Concord. Goldman Sachs & Co. LLC and Citi acted as placement agents for Concord in connection with the PIPE transaction. Greenberg Traurig is serving as legal counsel to Concord and Goodwin Procter is serving as counsel to Circle. Cowen Inc. is serving as lead capital markets advisor to Concord. Blueshirt Capital Advisors is serving as investor relations advisor to Circle.
Investor Conference Call
Management of Circle and Concord Acquisition Corp will host a recorded investor conference call on July 8, 2021 to discuss the proposed transaction and review an investor presentation. An audio webcast of the call will be available on: https://www.circle.com/investors