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Financial-technology company Acorns Grow Inc. no longer intends to go public through a merger with a special-purpose acquisition company and will pay its one-time merger partner a termination fee.
Pioneer Merger Corp.
PACXU,
disclosed in a Tuesday filing that it and Acorns mutually agreed to terminate their plans to combine. Pioneer will now look for another merger partner.
“Given market conditions, we will be pivoting to a private capital raise at a higher pre-money valuation as we continue on our path to 10 million paid subscribers saving and investing for a better future,” Acorns Chief Executive Noah Kerner said in a statement.
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Acorns is due to pay Pioneer a termination fee of $17.5 million in aggregate, which it will do in monthly chunks through Dec. 15, 2022. If Pioneer hasn’t consummated a business combination on or before Dec. 15 and seeks to redeem its public shares, Acorns will be required to pay the company $15 million by Dec. 22, provided that Pioneer doesn’t “withdraw that determination,” according to the filing.
The companies had agreed to merge last May in a deal that valued Acorns at $2.2 billion. Acorns runs a fintech platform with checking, retirement, and investment accounts and lets people round up the spare change from their spending to use on investments.
Pioneer’s stock gained 4.0% to close at $10.40 on May 27, 2021 after the merger was originally announced. Since then, it has lost 4.7% to trade below where it closed prior to the merger announcement, while the S&P 500 index
SPX,
has gained 9.3% over the same time.
