CARY – Cary-based Fathom Holdings and Neighborhood Intelligence have terminated their merger agreement, leaving both public companies independent after their boards concluded current valuations did not reflect fair value.
Fathom disclosed in an Oct. 5 Form 8-K that the companies ended the June 16 merger agreement by mutual consent. The agreement is now void, and neither company owes the termination fee that had been defined in the deal.
The original all-stock transaction would have made Fathom a wholly owned subsidiary of Neighborhood Intelligence, the company formerly known as Bed Bath & Beyond. HousingWire reported that the agreement valued Fathom at about $53.38 million.
The companies had more recently explored replacing the merger with a stock-for-assets transaction involving roughly $130 million of Neighborhood Intelligence digital assets, including its stake in tZERO. The termination leaves Neighborhood Intelligence in control of those assets.
Fathom and Neighborhood Intelligence said they may still pursue strategic collaboration, including data-sharing arrangements, but any such work would require separate agreements and applicable approvals. Until then, both companies remain independent.
Fathom’s filing also disclosed a separate Oct. 1 amendment to senior secured convertible notes. The amendment extended the notes’ maturity from Oct. 1 to Nov. 1, reduced the conversion price from $4.25 to $0.65 per share and set interest at 18% a year until the obligations are paid. It also caps issuances under the notes at 19.99% of Fathom’s shares outstanding as of Oct. 1.
Fathom represented that no event of default under the notes was continuing. The company also disclosed that board chairman Scott Flanders is one of the note holders and that independent, disinterested directors approved the related-party transaction.
For North Carolina, the immediate business consequence is that a Cary-headquartered public real estate-services company will continue operating as an independent business instead of becoming a Neighborhood Intelligence subsidiary. The filing and independent report do not announce Cary layoffs, an office closure or new local investment, so those outcomes should not be assumed.