Key Points
- Dynamix Corporation III has raised an upsized $175 million in an initial public offering, people familiar with the matter told CNBC.
- The SPAC may also opt to issue additional shares, raising a total of $201.25 million that will be used to acquire a company in the AI, energy or digital asset class sector.
- Dynamix III’s launch comes as the SPAC market cautiously emerges from a sharp downturn in new deals.
A Nasdaq-listed special purpose acquisition company focused on energy, digital assets and AI has raised an upsized $175 million in an initial public offering. Dynamix Corporation III may also opt to issue additional shares, bringing the final amount raised to $201.25 million, to meet the increased demand from SPAC investors, people familiar with the matter told CNBC. The SPAC, led by executives with prior experience in blank-check transactions, has engaged advisors from commercial real estate firm Prologis to aid in the search for suitable acquisition targets, according to its SEC filings. Execs from AI darling Nvidia are also aiding in the hunt for deals, a person close to the company told CNBC. A SPAC, or “blank-check company,” is a shell corporation with no commercial operations. It is created with the sole purpose of raising capital through an initial public offering. The proceeds of that IPO — in this case, up to $201.25 million — are used to acquire a private company. The SPAC’s managers typically have a set timeframe, often 18 to 24 months, to find a target and complete a merger. For the private company, this “de-SPAC” transaction is an alternative to a traditional IPO, offering a potentially faster path to the public markets with a pre-negotiated valuation. Dynamix Corp III filed its intention to raise capital in August, and shares of the SPAC began trading on Nasdaq under the ticker DNMXU on Thursday. Filings reveal that Dynamix is focused on capitalizing on the surging demand for power and data centers driven by the boom in artificial intelligence. Billion-dollar target The $201 million potentially raised exceeds the initial targets outlined in SEC filings, reflecting the strong investor demand. The IPO was first marketed at $150 million in August before being increased to $175 million in September, filings show. Dynamix III plans to hunt for a merger target valued at $1 billion or more, one source close to the company told CNBC. To execute this, Dynamix named advisors, including Ali Harandi, a data center investing specialist at real estate giant Prologis , and Andrew Keys, chairman of The Ether Machine , a digital asset firm that Dynamix management previously took public via its second SPAC. The advisory group also includes Setaj Desai, who oversees global data center engineering and capacity planning at chipmaker Nvidia and Houston energy investor Steve Webster, according to the person familiar with the matter. Desai and Webster did not immediately respond to a request for comment from CNBC. SPACs are back? Dynamix III’s launch comes as the SPAC market cautiously emerges from a sharp downturn. The blank-check boom of 2020 and 2021 saw hundreds of SPACs raise billions. According to Bank of America, nearly 800 SPAC transactions occurred in 2020 and 2021, compared to just 30 in 2023 and 50 in 2024. However, the share price performance of companies taken public via SPACs during that period has been largely disappointing for public market investors. Less than a tenth of the SPAC deals had positive share price returns six and 12 months after the transaction, according to BofA analysis. Factors contributing to the bust include concerns about the quality of the acquired company and high valuations, among others, BofA’s equity strategist Jill Carey Hall said in a note to clients earlier this year. Against this backdrop, Dynamix, led by CEO Andrejka Bernatova, a former investment banker and private equity executive, will be executing its third SPAC. Dynamix Corporation II raised $166 million in November last year and announced a merger agreement with The Ether Machine in July. An earlier SPAC named ESGEN, raised $276 million in 2021 and merged with a residential solar firm to form Zeo Energy in March 2024. Cohen & Company Capital Markets acted as the sole investment bank underwriting Dynamix III’s IPO.