TPG closes SPAC after failing to find a deal

TPG closes SPAC after failing to find a deal

by Chibuike Oguh

NEW YORK (Reuters) – A blank check company backed by private equity firm TPG said on Friday it plans to wind down its operations and return the money to investors after it failed to find a suitable target to merge with during market volatility.

TPG Pace Beneficial Finance Corp. said it will start returning funds to investors after it hits a two-year deadline to find a target company. It raised about $350 million in an initial public offering (IPO) in October 2020.

“With the second anniversary of TPGY’s initial public offering closing in October approaching, we don’t believe we will be in a position to complete the portfolio of businesses that meet our expectations,” said Carl Peterson, the company’s chairman, in a regulatory statement.

Peterson said the TPG-backed Special Purpose Acquisition Corporation (SPAC) struck a deal with electric vehicle charging company EVBox Group two months after its initial public offering in December 2020, but that agreement was terminated a year later after unsatisfactory issues were revealed during due diligence. .

TPG has been a prolific sponsor of SPACs among private equity firms. TPG Pace Beneficial II raised $350 million in an initial public offering in April 2021, while TPG Pace Tech Opportunities II canceled a plan to raise $450 million from investors in April of this year due to volatile markets.

A TPG spokeswoman declined to comment.

SPACs are shell companies that raise funds to acquire private companies for the purpose of going public, allowing these companies to avoid traditional IPOs to enter the public markets.

Investors’ appetite for SPACs has waned over the past year due to stricter regulations, higher interest rates and declining public market valuations.

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Several prominent SPAC sponsors, including Chamath Palihapitiya and hedge fund manager Bill Ackman, have shuttered blank check companies in recent weeks after failing to find suitable targets.

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