North Atlantic (NAAC) Terminates TeleSign Deal


North Atlantic (NAAC) Terminates TeleSign Deal

North Atlantic (NASDAQ:NAAC) announced this afternoon that it has mutually terminated its combination agreement with communications platform Telesign, effective immediately.

Similar to a handful of other SPACs we’ve seen, North Atlantic cited current market conditions as the root of the termination. CEO of North Atlantic Gary Quin stated in the press release that ongoing market volatility “made it impossible” to complete the merger with Telesign.

The deal includes a $200 million minimum cash condition and its $107.5 million PIPE does not fully cover this, although North Atlantic also has about $380 million in trust. The PIPE drew investment from a group of investors including SFPI-FPIM as a key investor, to fund TeleSign’s growth plans.

Going forward, the special meeting of NAAC stockholders to approve the proposed transaction has been cancelled and NAAC will seek an alternative business combination.

And, with a deadline of January 26, 2023, the SPAC still has several month on its clock to seek out its alternative business combination. North Atlantic raised $330 million at IPO on January 22, 2021 and intends to combine with a consumer, industrials or telecommunications business in Europe or North America. The SPAC is led by Chairman Andrew Morgan, CEO Gary Quin, President Patrick Doran, and CFO Mark Keating.

Volatility within the SPAC and equity markets are creating a difficult environment for SPACs and IPOs alike, making North Atlantic’s deal the 27th to terminate this year and the second this week. But, this termination may have not been a surprise to some as North Atlantic postponed its shareholder meetings twice with its most recent postponement from early June lacking a new date for a renewed attempt. It postponed an earlier meeting on May 18 and noted at the time that it had received sufficient votes to approve the deal, but not all closing conditions had been met.

The SPAC initially announced its $1.3 billion combination with Telesign late last year on December 16. Marina del Ray, California-based Telesign provides security solutions through APIs, combining digital identity with global communications capabilities to help enterprises connect, protect and engage with their customers.

Telesign recently announced its first quarter revenues reached $111.6 million for a 20.8% year-on-year growth rate and a gross profit margin of 22.3%.