D-Orbit bails on US SPAC merger as investors’ risk appetite shrinks
Satellite firm D-Orbit has bailed on its merger with a US special purpose acquisition company (SPAC) Breeze Holdings Acquisition Corp. as rocky markets spell investor concerns.
The pair came to the conclusion mutually, D-Orbit’s primary investor Seraphim Space Investment Trust said today.
Despite tech stocks recovering from a sell-off earlier this year, which saw millions wiped from the valuations of startups and heavyweights alike, the economic climate in the US and the UK has inflamed investors’ risk appetites.
D-Orbit, founded in Italy, focuses on orbital transport services, which is hoped to be used to repair and collect broken satellites.
“Since this agreement was first announced in January, financial markets have changed substantially, and it is clear that the merger agreement is no longer viable for either of the parties,” James Bruegger, chief investment officer of investment management arm Seraphim Space Manager, said in a statement.
“Nevertheless, this does not change our outlook for D-Orbit, and we remain confident about the future of the company.”
The cancelled merger, which likely would have seen D-Orbit list on the Nasdaq, is not unsurprising for a startup, despite the wave of consolidation washing over the satellite sector, according to onlookers.
SPAC listings have been a good option for smaller players in the past, such as Rocket Lab and Astra Space.
However, Francesca Gregory, associate analyst at GlobalData told City PM in May, amid the global tech sell-off, that SPAC listings have “shown signs of falling out of favour over the course of last year”, amid regulatory scrutiny and falling risk appetite.
“IPO contenders in the emerging space economy will need to be confident in their cash flows to clear the financial and regulatory hurdles of going public,” she explained. “Uncertainty in the wider market environment will hamper the prospect of a space company IPO in the short term.”