Canyon Bridge, K2 Venture founders join Asia SPAC wave

Peter Kuo, a co-founding partner at Canyon Bridge Capital Partners – a GP that acquires global technology assets with a view to supporting China expansion – raised $115 million through PTK Acquisition Corp. The SPAC will target companies with enterprise values of $300-800 million involved in information technology, hardware and software systems, and gaming and digital entertainment.

Kuo's fellow directors have backgrounds in the semiconductor space, working for the likes of VIA Technologies, Intel Corporation, Foxconn Technology Group, Siemens, and Texas Instruments. Canyon Bridge also focused on this area, notably failing to acquire Lattice Semiconductor as US regulators blocked the deal and then successfully pursuing UK-based Imagination Technologies.

In keeping with standard practice for SPACs, the sponsor and founders have subscribed to shares for a nominal sum that will convert into a 20% stake in the entity on completion of the offering. A total of 11.5 million units were sold in the offering at $10 apiece, according to a statement. Each unit comprises one ordinary share and one warrant. The warrant can be converted into one-half of one share at $11.50 per share. The sponsor has also committed to buy 6.8 million warrants at $0.50 apiece, the prospectus shows.

Once the SPAC identifies a target, a majority of investors must vote in favor of the transaction. On completion, they can exercise their warrants and purchase one ordinary share for each whole warrant or redeem some or all their shares for cash. If there is no deal within 18 months of the offering, investors will get their money back.

Separately, Malacca Straits Acquisition raised $125 million through the sale of 12.5 million units at $10 apiece. The share-plus-warrant structure – as well as the sponsor participation – is like that of PTK. The SPAC has a remit to target media, food processing, renewable energy, and healthcare assets across Southeast Asia. Enterprise values will be in the $300-500 million range, according to the prospectus.

Malacca Straits counts Hong Kong hedge fund Argyle Street Management (ASM) as an indirect member of its sponsor group. The SPAC also expects to work closely with TIH, a Singapore-listed closed-end fund that invests in Southeast Asia. TIH's largest shareholder is Indonesia-based Lippo Group.

Kenneth Ng, a founding member of Elliot Management's Asian arm and latterly founder and managing partner of Ark Pacific Capital Management, is CEO of Malacca Straits. The CFO, Stanley Wang, is a founder and managing director of K2 Venture Capital. Kin Chan, founder of CIO of ASM, serves as an advisor.

Korean private equity firm ACE Equity Partners recently became the first Korean GP – and only the third in Asia in recent years – to sponsor a SPAC. It wants to raise $200 million to pursue IT infrastructure assets. The other GPs to sponsor SPACs in Asia are New Frontier Group and CITIC Capital. New Frontier used the structure to buy Chinese hospital operator United Family Healthcare from TPG Capital.

The handful of other Asia-related SPACs to emerge since 2018 have not been sponsored by private equity firms. For example, Chinese co-working space operator Ucommune earlier this month merged into a SPAC led by an individual who primarily invests in technology assets through her family office.

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• Topics
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• Southeast Asia
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