Tucson-based stratospheric balloon operator World View Enterprises and a blank-check company have mutually agreed to end their merger agreement to take World View public on the New York Stock Exchange.
World View and Los Angeles-based Leo Holdings II Corp. signed a termination agreement on Nov. 20, according to documents filed with the U.S. Securities & Exchange Commission.
Leo Holdings Corp. II is a so-called "special purpose acquisition company" or SPAC, also known as a blank-check company, set up solely to acquire privately owned companies and take their stock public while avoiding the more rigorous process of a traditional initial public offering or IPO.
In a joint statement, the companies said World View garnered strong interest from potential investors since announcing the initial merger agreement in January.
World View Enterprises has launched its Stratollite balloon vehicles from the Spaceport Tucson site south of Tucson’s airport.
“However, given challenging market conditions, World View and Leo jointly determined that it was the best course of action at this time to not proceed with their previously announced transaction,” the companies said.
Based at a building and launch facility leased from Pima County south of Tucson International Airport, World View since 2017 has flown its proprietary, steerable balloon vehicles on more than 100 research missions to stratospheric heights of nearly 100,000 feet, and the company is taking reservations for manned, tourist flights aboard pressurized passenger capsules.
In a statement to the Star, World View said the company cited strong investor support as well as “strong economic headwinds” that led to the joint decision to terminate the merger deal.
“World View will remain private (for now), and we will continue to focus on what we have been doing: growing the company, expanding into new markets, executing our manifest, and ultimately creating additional value for the company," the company said.
World View says it has maintained its workforce of at least 90 full-time employees this year as required under its lease deal with Pima County.
Because it will not be able to consummate the deal within the time frame specified in its 2021 articles of association, Leo Holdings II said it will liquidate its assets and redeem its investors’ shares for about $10.95 per share.
It’s been a tough year for SPACs, as that market saw a 76% decline in IPOs compared to last year and a record number of liquidations in the first half of 2023, according to the merger advisory firm Kroll LLC.
SPACs are facing many challenges, including disappointing performance by newly SPAC-merged companies, an uncertain economic outlook and rising interest rates, Kroll said.
