Defense contractor Gresham Worldwide Inc. and special-purpose acquisition company Ault Disruptive Technologies Corp. agreed Monday to merge in a deal that values Gresham at $83 million, expanding the company's profile with the guidance of two law firms.

Gresham to Trade on NYSE American Exchange

Shares of Gresham are set to begin trading in the fourth quarter of 2024 on the NYSE American exchange if the deal closes as planned. Nason Yeager Gerson Harris & Fumero PA is representing Gresham, while Olshan Frome Wolosky LLP is advising Ault Disruptive.

Gresham expects to go public at a pro forma enterprise value of $83 million and receive $1 million in fresh proceeds, assuming no redemptions by Ault Disruptive's shareholders. Additionally, Gresham plans to relocate its corporate offices from California to Delaware before the merger concludes.

Gresham $83M SPAC Merger : Gresham's Diverse Operations and Expansion Plans

Gresham manufactures medical testing equipment and distributes electronic components, serving defense and aerospace companies as well as the medical technology, transportation, and telecommunications sectors. The company's operations extend across Israel, the United Kingdom, Connecticut, and California.

Gresham CEO Jonathan Read highlighted the significance of the merger for the company's growth and expansion, especially in providing more defense products for NATO members.

"This merger marks a significant step for Gresham Worldwide," Read said. "We also believe that being on a national exchange will give us access to the resources to continue executing acquisitions of smaller defense contractors and accelerate our growth both organically and through M&A."

The combined company's shares are expected to trade under the symbol "GWWI." Currently, Gresham's existing shares trade over the counter at about 12 cents per share.

Background on Ault Disruptive Technologies Corp.

Ault Disruptive, which listed on the NYSE American after completing a $100 million initial public offering in December 2021, is a special-purpose acquisition company, or SPAC. SPACs, also known as blank-check companies, conduct IPOs with the intent of acquiring private companies and taking them public within a set timeframe.

"The increasing global demand for defense-related technologies, driven by ongoing conflicts and tensions, underscores the value of Gresham's offerings," Ault Disruptive CEO William Horne stated.

Gresham $83M SPAC Merger : SPAC Market Trends

SPACs saw a surge as an alternative to traditional IPOs around 2021, fueled by pandemic-era stimulus and near-zero interest rates. However, the market has cooled over the past few years due to rising borrowing costs, weak stock performances, and increased regulatory scrutiny.

In a separate development, another SPAC merger set to close this year was canceled. Gene therapy firm American Gene Technologies International Inc. and 10X Capital Venture Acquisition Corp. III informed regulators on Friday that they mutually agreed to terminate their merger without providing a reason. The companies had announced plans last August to merge in a deal valued at approximately $500 million, aiming to take American Gene public in the first quarter of 2024.