Ascendent founder sponsors SPAC targeting global deals

Opportunities are expected to emerge with the confluence of several trends, the prospectus states. These include changing consumer behaviors accelerated by COVID-19, a strategic reshuffling of attractive consumer assets regionally and globally, and rapidly evolving consumption patterns within China’s expanding middle class.

Similarities exist between this mandate and that of Primavera Capital Acquisition Corporation (PCAC), a SPAC affiliated to Chinese GP Primavera Capital Group. There is an expectation that consumer businesses that were under pressure before COVID-19 will be more open to being acquired or selling off assets. Meanwhile, increasing exposure to China is seen as a long-term growth driver for these businesses.

Meng is chairman of the SPAC – Silver Crest Acquisition Corporation – and sole manager of the sponsor entity. However, his time commitment to the project will be limited, a source close to the situation said. The team running the SPAC is separate from Ascendent, and it is pursuing a different investment mandate to the firm’s funds, targeting deals that are larger and more global in nature, the source added. Ascendent declined to comment on the matter.

Derek Cheung, a managing director at Ascendent, is CEO of Silver Crest, while Christopher Lawrence, a US-based investment banker who currently runs independent advisory firm Snow Owl Advisors, is serving as vice chairman. Meng and Lawrence previously worked together at Credit Suisse in the early 2000s.

Other management team members reflect the SPAC’s consumer technology remit. Among them are Wei Long, co-founder of Dianping, a Chinese online-to-offline services business that merged with Meituan, and Mei Tong, who has previously worked for Walmart and Hopu Investment. Andy Bryant, former chairman of Intel Corporation, Denise Morrison, ex-CEO of The Campbell Soup Company, and Steeve Hagege, who has held various senior roles at L’Oreal, are also involved.

Silver Crest upsized its offering from 25 million to 30 million units, priced at $10 apiece. Each unit comprises one class A ordinary share and one-half of one redeemable warrant. Each whole warrant can be converted into a class A ordinary share at a price of $11.50 per share.

Once a target is identified, a majority of investors must vote in favor of the transaction. On completion, they can exercise their warrants and purchase shares or redeem some or all their shares for cash. If there is no deal within 24 months of the offering, investors get their money back.

The SPAC sponsor agreed to purchase $7 million in warrants, subject to the standard conversion conditions. In addition, the sponsor and management subscribed to class B shares for a nominal sum that will convert into a 20% stake in the entity on completion of the offering.

Ascendent is an upper middle-market private equity firm currently deploying its third fund, which closed at just over $1 billion at the end of 2019. Its approach is to forge relationships with entrepreneurs and management teams in China, advise on value-add initiatives, strategic alliances, and acquisitions, and contribute capital when appropriate. Portfolios tend to be relatively concentrated with equity commitments typically in the $50-150 million range.

Few Asia-related SPACs have direct ties to PE firms, as sponsors of the structure or as designated affiliates. Exceptions include Primavera, Vickers Venture Partners, CITIC Capital, and ACE Equity Partners. The Bridgetown series, launched by PayPal co-founder Peter Thiel and Richard Li, founder of Hong Kong’s Pacific Century Group, arguably occupies a middle ground. The sponsor is controlled by Thiel Capital and Pacific Century, which controls Pinebridge Investments.

Other SPACs are driven by individuals with experience in the private equity industry. They include Ravi Thakran, formerly head of L Catterton’s Asia operation, Peter Kuo, a co-founding partner at Canyon Bridge Capital Partners, Raymond Zage, CEO of Tiga Investments and previously Asia head at Farallon Capital, and Kenneth Ng, a founding member of Elliot Management’s Asian arm.

All SPAC fundraising activity is driven out of the US. However, the Singapore Exchange recently said it would consider allowing listings by these structures.

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• Topics
• Greater China
• Fundraising
• IPO
• North America
• Consumer
• Technology
• China
• SPAC
• Ascendent Capital