Israeli SPAC Israel Acquisitions Corp. (Nasdaq: ISRL) has found a new merger target, six months after the merger with Pomvom (TASE: PMVM) was cancelled.
The SPAC, headed by Izhar Shay and Ziv Elul, has announced a merger with Israeli company Gadfin. Gadfin is a developer of technology for deliveries using hydrogen-fueled drones. Its value for the purposes of the merger will be up to $200 million, and the deal is expected to close during the second half of 2025, subject to approvals.
A SPAC (special purpose acquisition company) is a company without activity that raises money on a stock exchange with the aim of finding a company with which to merge within an allotted period, or else return the money raised to the investors. For privately-held companies, a merger with a SPAC is an alternative to an IPO as a way of becoming listed on a stock exchange.
The SPAC trend, which was very strong in 2020-2021, has since faded, but there are still SPACs raising money and looking for acquisition targets.
Izhar Shay, a former minister of science and technology, is chairperson of Israel Acquisitions Corp. while Ziv Elul , who ran ad-tech company Fyber until it was sold for $600 million in 2021, is CEO. The SPAC was floated two years ago and raised $143 million, with the aim of finding an acquisition target in Israel.
Gadfin is headed by its co-founder Eyal Regev. According to IVC, it was founded in 2018 by Regev, Ilan Yuval and Ran Kleiner, and has raised $7 million from SIBF VC and Gehr Group, among other investors. Last year, "Globes" reported a pilot program in which Gadfin is participating for delivering drugs and medical equipment to government hospitals. The program is due to reach a rate of 60 deliveries daily within three years. The program is worth $5 million to Gadfin.
'Significant milestone'
"This business combination agreement marks a significant milestone, aligning well with the vision we set forth when launching our SPAC," Shay said. "Gadfin's innovative hydrogen-powered drones, capable of long-range, zero-emission deliveries, position the company to seize numerous growth opportunities in the drone logistics industry, both in the US and globally. We believe this is an exceptional company to take to the Nasdaq."
"We are thrilled to announce this business combination, marking a pivotal milestone for Gadfin and underscoring the confidence placed in us by leaders in the hi-tech and financial sectors in Israel and the United States," said Regev.
As mentioned, Israel Acquisitions Corp. had planned to merge with Pomvom, which is traded on the Tel Aviv Stock Exchange. The company describes itself as "a digital platform that seamlessly connects guests to media of themselves captured by park or venue cameras."
The merger was to have taken place at a valuation of $125 million for Pomvom, substantially above its market cap, but the agreement was cancelled last summer "because of the change in market conditions."
Tiberius Capital Markets, a division of Arcadia Securities, is acting as financial advisor to Israel Acquisitions Corp, with Reed Smith LLP, and Stuarts Humpries acting as legal advisors. Herzog, Fox, and Neeman is acting as legal advisor to Gadfin.
