VFX and animation company DNEG, effects home to the new “Venom” sequel, multiple Marvel movies and more, will not go forward with its planned $1.7 billion SPAC deal with Sports Ventures Acquisition Corp., citing “unfavorable” market conditions, the companies announced Thursday.
The companies had announced the plan in January.
“Due to the headwinds in the SPAC marketplace and general market volatility, we have decided to terminate our SPAC process with Sports Ventures,” said DNEG Chairman and CEO Namit Malhotra. “Alan [Kestenbaum] and the team at Sports Ventures have been great partners in this process, and we wish them well as they move forward.”
The reversal comes amid a sharp downturn in the SPAC, or special purpose acquisition company, market. SPACs are created by investor groups solely to acquire or merge with existing private companies to help take them public. The DNEG deal was intended to bring the new combined company to the Nasdaq index.
The deal came together as DNEG was reporting better-than-expected earnings and revenue for its fiscal year ending in March. It had hoped the SPAC deal would help it pursue expanded business including gaming, the metaverse and original content.
DNEG has operations in Los Angeles, Montréal, Toronto, Vancouver, London and across Asia. The company was formed through the 2014 merger between Prime Focus in 1997 and Double Negative founded in 1998, and since then, DNEG’s team has won the Oscar for Best Visual Effects six out of the last 10 years.