Vertex, Tikehau lead Singapore SPAC charge

These are the first instances of sponsors taking advantage of Singapore’s SPAC regime, which came into force at the end of last year. Hong Kong subsequently launched its own framework as the two jurisdictions look for new ways to facilitate listings by emerging technology companies on Asian stock exchanges.

Vertex Technology Acquisition Corporation wants to raise SGD 200m (USD 148m) through the sale of 40m units at SGD 5.00 apiece. It will pursue fast-growing tech businesses in areas like cybersecurity and enterprise solutions, artificial intelligence, consumer internet, financial technology, autonomous driving and new energy vehicles, and biomedical technologies and digital healthcare.

The offering comprises an institutional placement of 11.2m units, a public tranche of 600,000 units, and commitments from 13 cornerstone investors and the sponsor – VVH – to buy 22.2m units and 6m units, respectively. Temasek Holdings-owned VVH has over USD 5.1 bn in assets under management (AUM) globally, most of it managed through a network of independent GPs.

Among the cornerstone investors are Venezio Investments, Asdew Acquisitions, DBS Bank, Dymon Asia, Fortress Capital Asset Management, Fullerton Fund Management, Greenpark Investments, Linden Capital, Lion Global Investors, Target Asset Management, Segantii Capital Management, and UBS Asset Management. Several of these investors are directly or indirectly controlled by Temasek.

Each unit comprises one ordinary share, 30% of one warrant issued on completion of the offering, and 20% of one warrant issued once the SPAC merges with a target. Each whole warrant will convert into one share at a price of SGD 5.75 per share, according to a prospectus.

On completion of a merger, investors 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, investors get their money back.

Meanwhile, the SPAC sponsor has agreed to pay SGD 10m for up to 20m in warrants, each of which will convert into one share at SGD5.75 per share. It stands to receive 10m additional shares if the overallotment option is fully exercised.

Tikehau, an asset manager with EUR 29.4bn (USD 34.8bn) in AUM and ambitions to boost its private markets exposure in Asia, is supporting Pegasus Asia as a continuation of its relationship with the Pegasus Europe SPAC franchise, which raised EUR 500m on Euronext last year. Financière Agache, a holding company controlled by Bernard Arnault, chairman and CEO of LVMH, is also involved in both.

Pegasus Europe was established by Jean Pierre Mustier, former CEO of UniCredit, and Diego De Giorgi, previously global head of investment banking at Bank of America Merrill Lynch. They are identified as the sponsors of Pegasus Asia, alongside Tikehau and Financière Agache.

The offering is structured like the Vertex one – an international placement of 24.6m units, a public tranche of 1m units, and a sponsor commitment of 4.4m units – and also priced at SGD 5.00 per unit. Each unit comprises one class A ordinary share and one half of one warrant, with each warrant converting into one share at SGD 5.75 per share.

The sponsors will pay SGD 7.75m for 8.5m in class B founder shares and receive 16.2m in warrants for a nominal sum. Each warrant converts into one share at SGD5.75 per share. In addition, Tikehau and Financière Agache have entered into a forward purchase agreement under which they will buy SGD 40m in shares and warrants once the SPAC concludes a merger.

Targets will likely be from technology-enabled businesses in the consumer, financial services, property, and healthcare sectors, as well as digital services providers, a prospectus states.

Government-related entities in Singapore have announced a string of initiatives – including a pre-IPO fund and an IPO anchoring fund – to attract listings by high-growth companies. The city-state’s prospects as a SPAC venue, and as a broader capital markets hub, in part rest on whether it can address longstanding concerns about limited liquidity.

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• Topics
• Southeast Asia
• IPO
• Regulation
• Technology
• Singapore
• SPAC
• Vertex Holdings
• Tikehau Capital