Investors unconvinced by HUB Security’s SPAC merger
The share price of Israeli cybersecurity solutions company HUB Security (TASE:HUB) fell 35.16% this morning to 4.55 NIS, giving a market capitalization of 563,000 NIS ($175,000), after the company announced that the Israeli Ministry of Defense had disqualified a winning bid in a tender by its subsidiary QPoint Technologies. HUB Security added that the disqualification and cancellation of the tender “could influence the company’s results in 2022”.
HUB Security Agrees to SPAC Merger at $1.28 Billion Valuation
This development comes after last week HUB Security announced that it had signed a memorandum of understanding (MoU) to merge with Nasdaq-listed special purpose acquisition company (SPAC) Mount Rainier Acquisition Corp. , at a valuation of $1.28 billion. . The merger will provide HUB with $172 million in additional liquidity, although buyouts by Mount Rainier’s public shareholders could reduce that amount. HUB also said it has entered into underwriting agreements with Israeli and US institutional investors for gross proceeds of $50 million in public private investment financing (PIPE).
But investors did not give a vote of confidence to the planned SPAC merger. After initially rising, the stock retreated even before today’s sharp falls, leaving it with a market capitalization one-eighth of the planned SPAC merger.
HUB Security, led by CEO Eyal Moshe, provides cybersecurity solutions for cloud computing and data centers. Its flagship IoT-stripped Hub-on-Chip solution is for credit cards, cars, cameras, and more. The company is listed on the TASE after merging with ALD last year.
Published by Globes, Israel business news – en.globes.co.il – on March 27, 2022.
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