Healthwell Acquisition Corp. I (Nasdaq: HWEL) announced on Friday evening that its former target Starton has terminated its business combination.
Although the parties did not provide extensive detail regarding the termination, they clarified that the deal fell through due to certain closing conditions not being satisfied by the outside date of November 3.
Healthwell I unveiled its $339 million combination with Starton earlier this year in April. While the two sides initially agreed on a $15 million closing condition, they later reduced this to $10 million in September.
The SPAC brought about $253.7 million into the deal through its trust, but following redemptions from previous votes, it was left with around $41.8 million. Despite the expectation of supplementing this with $15 million from a PIPE or a debt facility, there has been no confirmation of securing this funding.
Paramus, New Jersey-based Starton is developing a line of treatments to improve efficacies in delivering drugs for certain types of cancer and mitigating the side effects of chemotherapy. Going forward, Starton will continue its clinical efforts to meet the completion of its study for the advancement of its patients.
As a result of this termination, Healthwell I will seek an alternative business combination. With a completion deadline of December 5, it currently has just a month to find a suitable target to combine with. However, it recently filed a proxy to hold a shareholder meeting aimed at extending this deadline until August 2024, granting them a nine-month window to finalize a deal.
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