Seattle-based investment bank Cascadia Capital has terminated a planned merger between its special purpose acquisition company (SPAC) and RealWear, a Vancouver, Washington-based maker of headsets to help industrial workers.
The merger between RealWear and the SPAC, called Cascadia Acquisition Corp. (Nasdaq: CCAI), was announced in February and supposed to close in the second half of this year. In a filing with the Securities and Exchange Commission, CCAI said the companies terminated the deal on Friday, and neither company has to pay a termination fee.
In a statement to the Business Journal, RealWear CEO Andrew Chrostowski said the company has deployed more than 70,000 units and has 5,000 customers.
"Given that we’re well positioned to continue to grow, we have a strong plan forward and are pursuing additional funding strategies that includes a Series D round," Chrostowski said in the statement. "That said, due to current market conditions, we will no longer be pursuing the specific business combination agreement with Cascadia Acquisition Corp."
When the companies announced the planned merger, both boards had approved the deal, but it still needed shareholder approval. The combined company was supposed to have a value of $375.5 million upon closing, assuming no CCAI stockholders redeemed their shares. The company was going to take the RealWear name and trade on the Nasdaq.
Cascadia, founded in 1999, is an investment bank that offers services in mergers and acquisitions, private capital and equity placement. Michael Butler, Cascadia co-founder and CEO, recently moved to Austin, Texas, and opened the bank's fifth office in the U.S. after Cascadia landed a more than $50 million investment from Atlas Merchant Capital in September. Butler said Cascadia had roughly 85 employees at the time of the investment.
SPACs, or "blank-check companies," form without a business line and start trading publicly, the goal being to merge with a private company and take it public. Local companies like Porch, Rover and Leafly have all reached the public markets through SPAC mergers. Although SPACs soared in popularity in 2020 and 2021, their popularity has dwindled during the current market downturn.
Cascadia didn't immediately comment on the terminated SPAC merger.
"CCAI was established with the intention of identifying and partnering with businesses that are utilizing technology and innovation to disrupt industry in sizable and expanding markets. RealWear perfectly fits these criteria, and we are thrilled to partner with them," Jamie Boyd, CEO of CCAI, said in the February news release announcing the planned merger.
RealWear was founded in 2016. The company makes headsets and accessories to help front-line workers view and share information while keeping their hands and fields of vision free. Its clients include Honeywell and Volkswagen. RealWear also makes software to help IT teams manage RealWear devices.
In August 2021, when Cascadia launched its SPAC, Butler said the investment bank's pedigree would separate it from the throngs of SPACs flooding the market, and the bank wanted to continue launching new SPACs in the future.
"We view the SPAC as an ongoing product for Cascadia. We're not a one-and-done," Butler said at the time. "We think the companies we partner with will pretty easily be able to delineate between us, our resources, our approach and the other SPACs out there."
