Japan's Advantage raises renewables-focused SPAC

It comes five months after the Japan-based private equity firm introduced a renewables and sustainability strategy. At the time, Advantage said that the new strategy would be run by a separate team and raise its own funds and other products.

Keiichi Suzuki, who formerly made alternative investments at Mitsubishi Corporation, was recruited to lead the renewables and sustainability strategy. He is CEO of the SPAC, with Richard Folsom, Advantage’s co-founder and representative director, serving as chairman.

Likely merger targets include renewable energy operators and developers, renewable technologies including offshore wind installation, communication networks, and energy storage, and energy services and solutions, notably the electric vehicle (EV) supply chain. Companies headquartered in China or that conduct the bulk of their business in the country will not be considered.

The SPAC, AP Acquisition Corp, will leverage Advantage’s networks and expertise – the prospectus highlights the private equity firm’s experience in corporate carve-outs – but the sponsor entity is effectively controlled by Folsom.

AP Acquisition sold 15 million units 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 common share at a price of $11.50 per share. Tokyo Century Corporation, a Japanese leasing business that holds a minority interest in Advantage expressed an interest in buying 2 million units.

Meanwhile, the SPAC sponsor bought $9.5 million in warrants. In addition, the sponsor and management subscribed to common shares for a nominal sum that have been converted into a 20% stake in the listed entity.

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 18 months of the offering – although there is an option to extend to 24 months – investors get their money back.

Just over 600 SPACs have raised $161.5 billion in the US in 2021 to date, compared to $83.4 billion from about 250 offerings in 2020. However, most of the fundraising activity was concentrated in the early part of the year. Since then, a combination of regulatory intervention and sub-par performance – most SPACs are trading below their IPO prices – have restrained the market.

Advantage closed its sixth flagship Japan buyout fund last year at the hard cap of JPY85 billion ($790 million), up from JPY60 billion in the previous vintage.

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• Topics
• North Asia
• Cleantech
• IPO
• Fundraising
• Japan
• SPAC
• Advantage Partners
• renewable energy
• Cleantech