After taking into account the considerable amount of time to complete the business combination along with current market conditions, HyperloopTT and Forest Road concluded that termination of the merger is in the best interest of their respective shareholders and employees
HyperloopTT and Forest Road Acquisition terminate their merger deal. (Credit: Ryn88668/Wikipedia.org)
Hyperloop Transportation Technologies (HyperloopTT), a US-based transportation and technology licensing company, has announced the mutual termination of its previously announced merger with special purpose acquisition company (SPAC) Forest Road Acquisition.
The merger deal was announced in November 2022 with a pre-money equity value of nearly $600m for HyperloopTT. At that time, the parties stated that subject to customary conditions and Forest Road shareholders’ approval, the deal was expected to close in the first half of 2023.
After taking into account the significant time to complete the business combination along with current market conditions, HyperloopTT and Forest Road concluded that termination of the merger is in the best interest of their respective shareholders and employees.
Had the deal closed as planned, it would have enabled the transportation and technology licensing firm to go public with a possible listing on the New York Stock Exchange (NYSE).
HyperloopTT CEO Andres de Leon said: “While we believe the proposed combination would have accelerated time to market for HyperloopTT’s leading hyperloop technology, we remain committed to the prospects for our company, its transformational transportation technology, and the underlying business opportunity at hand.
“I wish to thank HyperloopTT employees and contributors for their unwavering dedication and commitment throughout this process. Moving forward, we will continue to evaluate financing alternatives, including both public and private capital raises.”
Established in 2013, HyperloopTT is said to be powering a suite of next generation technologies to drive transportation in the future.
The US firm built a full scale hyperloop test track in France, a hyperloop insurance framework model, as well as model safety and certification guidelines.
HyperloopTT is said to have been actively involved in providing the European Commission and the US Department of Transportation (USDOT) with a critical technical understanding of hyperloop systems.
The SPAC deal with Forest Road would have given the company up to $330m in net proceeds at completion.
Forest Road co-CEOs and board of directors co-chairpersons Tom Staggs and Kevin Mayer said: “While we maintain our belief that HyperloopTT’s technology has the potential to address some of today’s most profound transportation challenges, persistent negative market conditions, coupled with our upcoming expiration date, made the execution of our proposed business combination challenging.”