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VM Hotel Acquisition Corp., a special-purpose acquisition company that planned to acquire distressed hotel assets, pivoted instead to purchase an air purification startup.
The SPAC was launched in 2021 by VCM Global Asset Management, which planned to pick up hotel assets across metros that were heavily impacted by the pandemic with hopes that the assets would eventually rebound, according to Commercial Observer.
VM Hotel entered into negotiations at the end of 2021 to purchase a five-hotel portfolio, four in the United States and one in Canada, at a purchase price of $411M as its qualifying acquisition.
But the agreement soured as early as February when it backed out of its deal to purchase a Sheraton hotel in Montreal and the Battery Wharf in Boston.
The dominoes continued to fall, as the company later backed out of a deal to purchase another Sheraton in Panama City Beach, Florida, prompting a legal complaint from the seller, Torchlight Investors, which sued VMH for $696K, though Torchlight later withdrew the complaint.
The death rattle for VM Hotel SPAC's part in the deal came in April when it backed out of plans to acquire two Skyline Investment hotels in downtown Cleveland.
SPACs boomed in 2020 and 2021, with private investors and hundreds of billions of dollars flooding the market. But their popularity has waned significantly, and investors have been left holding the bag in the wake.
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