Earlier this year, a SPAC merger between Israeli fintech unicorn Pagaya and capital market company EJF Acquisition Corp. looked like a solid bet for both companies. With Pagaya earning a valuation of $8.5 billion and the fintech eagerly advancing to an IPO, EJF was sure enough about the combination that it was willing to upside its equity PIPE to $350 million, up from its earlier offer of $200 million.
But in mid-June 2022, there no longer seems to be such a thing as a “sure thing.” Amid growing turmoil in the market, Barclays informed EJF that they would not be underwriting the SPAC deal as originally planned. In an even more alarming sign, there was a rush among Pagaya shareholders to sell stakes just a week before the company’s planned public offering.
Regardless of mounting confusion regarding the deal, however, EJF announced that its shareholders approved the merger at that $8.5 billion valuation. The deal is the second largest merger for an Israeli firm, and with UBS and JPMorgan retaining their roles in the transaction as underwriter and financial advisor respectively, it’s clear that plenty of major players still believe in this merger.