Avalanche Treasury Co. to Merge with MLAC in $675M SPAC Deal, Targeting Nasdaq Listing for Institutional AVAX Exposure

Executive Summary

Avalanche Treasury Co. (AVAT), a digital asset treasury company aligned with the Avalanche ecosystem, has finalized a business combination agreement with Mountain Lake Acquisition Corp. (MLAC), a Nasdaq-listed special purpose acquisition company. The transaction is valued at over $675 million, incorporating approximately $460 million in treasury assets. This merger aims to establish a leading public vehicle for institutional exposure to AVAX, the native token of the Avalanche blockchain. The combined entity is projected to list on Nasdaq in Q1 2026, pending regulatory and shareholder approvals.

The Event in Detail

Under the terms of the agreement, AVAT will merge with MLAC in a deal structured to provide institutional investors with a new pathway to AVAX. The transaction includes an initial $460 million in treasury assets, funded concurrently with or shortly after the announcement. AVAT is launching with an initial AVAX token purchase at a discounted market price and an 18-month priority on Avalanche Foundation sales to U.S. digital asset treasury companies. This structure offers investors an entry point at a 0.77x multiple of net asset value (mNAV), representing a 23% discount compared to direct AVAX purchases or passive ETF alternatives. The company's long-term objective is to accumulate over $1 billion worth of AVAX post-merger.

Bart Smith, CEO of AVAT, emphasized the company's role as an active, strategic partner within the Avalanche network, aiming to offer more than passive exposure to digital assets. Emin Gün Sirer, founder of Ava Labs, will serve as a strategic advisor, and John Nahas, Avalanche's Chief Business Officer, will join the public company's board. Key partners involved in the transaction include FalconX for execution and credit services, and Monarq for treasury operations. PJT Partners and Barclays are advising AVAT, with Skadden and Davis Polk providing legal counsel.

Financial Mechanics and Strategic Positioning

AVAT's financial model is designed to attract institutional capital through a discounted entry point of 0.77x mNAV, providing a 23% cost advantage over direct token acquisition or existing passive investment products. This mechanism allows investors to gain exposure to AVAX at a lower valuation relative to its underlying assets. The company's capital deployment strategy is multifaceted, focusing on three core pillars: targeted protocol investments to enhance Avalanche's transaction flow, partnerships for tokenizing real-world assets (RWAs) and stablecoins, and validator infrastructure to support institutional Layer 1 launches. This active management approach differentiates AVAT from passive investment vehicles, positioning it as a growth engine for the Avalanche ecosystem.

Unlike corporate treasury strategies primarily focused on balance sheet diversification, such as some firms holding Bitcoin as a reserve asset, AVAT's strategy extends to active ecosystem integration and development. By investing directly in the Avalanche network's infrastructure and applications, AVAT seeks to generate yield and utility beyond mere token accumulation. This approach aims to address institutional demand for more integrated digital asset exposure.

Broader Market Implications

The merger signifies a notable development for the broader Web3 ecosystem, particularly in the realm of institutional digital asset adoption. The creation of a Nasdaq-listed vehicle for AVAX exposure is expected to enhance confidence in the Avalanche network and attract additional institutional capital. This structured investment pathway could increase demand for AVAX and foster ecosystem development through strategic capital deployment into key initiatives like RWA tokenization and stablecoin infrastructure. The transaction aligns with growing trends toward regulatory clarity in the crypto space, potentially accelerating mainstream institutional engagement with blockchain technologies. By bridging traditional finance expertise with crypto-native leadership, AVAT aims to establish an institutional-grade on-ramp for the Avalanche blockchain, potentially influencing future corporate adoption models for digital assets. This move also highlights a shift from purely speculative crypto investment to more integrated, utility-driven institutional participation.