TPG shutters SPAC after failing to find deal

By Chibuike Oguh

NEW YORK (Reuters) – A blank-check company backed by private equity firm TPG Inc said on Friday it plans to wind down its operations and return money to investors after failing to find a suitable target to merge with during market volatility.

TPG Pace Beneficial Finance Corp said it would begin returning money to investors after reaching the two-year deadline for finding a target company. It raised about $350 million in an initial public offering (IPO) in October 2020.

“With our second anniversary of the closing of TPGY’s IPO approaching in October, we do not believe that we will be in position to complete a business combination that meets our expectations,” Karl Peterson, the company’s chairman said in a regulatory filing.

The TPG-backed special purpose acquisition company (SPAC) had struck a deal with electric car charging company EVBox Group two months after its IPO in December 2020, but that agreement was terminated a year later after unsatisfactory issues were uncovered during due diligence, Peterson said.

TPG has been a prolific sponsor of SPACs among private equity firms. Its TPG Pace Beneficial II had raised $350 million in an IPO in April 2021, while the TPG Pace Tech Opportunities II canceled a plan to raise $450 million from investors in April this year owing to choppy markets.

A TPG spokeswoman declined to comment.

SPACs are shell companies that raise funds to acquire private firms with the purpose of taking them public, allowing such companies to sidestep a traditional IPO to enter public markets.

Investor appetite for SPACs has cooled over the past year due to tougher regulations, rising interest rates and a downturn in public market valuations.

Several prominent SPAC sponsors, including Chamath Palihapitiya and hedge fund manager Bill Ackman, have in recent weeks shuttered blank check companies after failing to find suitable targets.

(Reporting by Chibuike Oguh in New York; Editing by David Gregorio)