ACE Convergence (ACEV) PIPE Investor Terminates $175M Investment

ACE Convergence (NASDAQ:ACEV) announced in an 8-K this morning that its PIPE investor Oaktree had terminated its subscription agreement funding $175 million of the $200 million in convertible notes the SPAC had arranged for its combination with Tempo Automation.

On July 6, ACE amended the PIPE agreement to provide investors a pro rata portion of 2,000,000 shares as an incentive to stay in. But, the outside date for the PIPE came and went on July 18 and Oaktree terminated on July 30. In between, the parties announced that Tempo Automation’s plans to acquire stakes in Compass AC holdings and Whizz Systems had fallen through last Thursday.

ACE must maintain at least $320 million in cash available in order for the deal to close and it still has $25 million in PIPE commitments from sponsor affiliate Tor as well as a $100 committed equity agreement by which Cantor Fitzgerald will purchase shares following the deal’s close.  The SPAC now has about $40 million in trust remaining after 82.8% of its shares were redeemed through two earlier extension votes. As such, the parties could be in for more deal tweaks.

The parties initially announced their $919 million deal on October 14, 2021. San Francisco-based Tempo provides outsourced digital manufacturing services for electronics and other circuitry applications.