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Neil Selfe, CEO of Infor Acquisition Corp., is seen this file photo.Mark Blinch/The Globe and Mail

The first takeover launched by a Canadian special purpose acquisition corporation, or SPAC, was cancelled Wednesday, as Infor Acquisition Corp. called off plans to merge with lease finance company ECN Capital Corp.

Infor is a $220-million SPAC that was created in 2015 and the company announced plans in July to merge with ECN Capital, which was being spun out of Element Financial Corp. ECN Capital agreed to the merger as a cost-effective way to raise capital that the newly launched company planned to use for acquisitions.

Infor and ECN Capital said Wednesday the decision to terminate their transaction was mutual, and driven by the fact that Infor shareholders were unlikely to approve the transaction at a vote scheduled for Oct. 24.

"ECN Capital's common shares are not currently trading at a price that would make the arrangement compelling for the [Infor's] shareholders given the exchange ratio agreed to under the arrangement," said Neil Selfe, chief executive officer of Infor. ECN Capital shares closed Wednesday at $3.09 on the Toronto Stock Exchange. As part of the now-cancelled transaction, ECN Capital estimated that its fair market value was $4.41 per share.

Mr. Selfe said Infor will continue to look for alternative acquisitions. SPACs have two years to find an investment, or regulations require them to refund their capital to backers. Infor's deadline for doing a deal is May, 2017.

Steven Hudson, chief executive officer at ECN Capital, said his company will look to other sources of funding for growth initiatives.

"The [Infor] arrangement was an attractively priced incremental option to capitalize this growth strategy," Mr. Hudson said. "As an investment-grade commercial finance company with more than $8.2-billion in owned and managed assets, ECN Capital is favourably positioned to access adequate internal and external funding sources to execute on its business plan and growth strategy."

Six Canadian SPACs raised approximately $1-billion in 2015 and early this year, cash that is earmarked for acquisitions, but none of these so-called "blank-cheque companies" has been able to complete a transaction.

Dundee Acquisition Ltd. is the only other SPAC to announce a potential deal, with its shareholders scheduled to vote later this year on the takeover of a university residence business named CHC Student Housing Corp.

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