SPAC backed by Vision Knight founder makes Hong Kong debut

Vision Deal HK Acquisition Corp, which Wei launched in conjunction with China cross-border merchant bank DealGlobe and Hong Kong-based corporate finance advisory firm Opus Financial Group, raised HKD 1bn (USD 127m) through the sale of 100.1m units. Each unit comprises one class A share and one half of one convertible warrant.

The stock closed down 1.1% at HKD 9.89 on June 10. Hong Kong’s first SPAC, CMB International Asset Management-backed Aquila Acquisition Corp, listed in March and is currently trading 7% below its offering price at HKD 9.30.

Vision Deal HK Acquisition will pursue business combinations with companies in China specialising in smart car technologies or cross-border e-commerce. “We believe that certain macroeconomic factors and industry trends will continue to support the smart car technologies market and consumption upgrading trends in China,” the prospectus noted.

It noted that China’s smart car industry is advancing rapidly thanks to favourable government policies and domestic technological innovation. Meanwhile, companies that can leverage both China’s consumer market and its strong domestic supply chains are well-positioned to get traction overseas.

Wei (pictured) established Vision Knight after leaving his position as CEO of Alibaba Group’s B2B marketplace in 2011. The firm had USD 2.2bn in assets under management as of December 2021 across two US dollar-denominated and five renminbi funds. It invests in internet-enabled consumer and B2B services companies in China.

Speaking to AVCJ last year, Wei described his strategy as Bain Capital plus Bain Consulting – using free consulting services to generate investment opportunities. “Many start-ups achieve significant scale in a short period of time, yet they lack accumulated management experience,” he said. “The most valuable inputs to them are strategic consulting and management consulting.”

Wei and DealGlobe each hold 45% of the Vision Deal HK Acquisition sponsor entity, while Opus has 10%. The sponsors purchased approximately 25m class B shares for a nominal sum – giving them a 20% interest in the listed SPAC – and they have subscribed to 35m warrants at a price of HKD 1.00 apiece. Each warrant converts into one class A share at HKD 11.50 each.

A merger, or de-SPAC, must be announced within 24 months of the offering and consolidated 12 months after that, or investors can claim their money back. On completion of a merger, investors hold the right to redeem or cash out.

Hong Kong and Singapore have both launched SPAC regimes as they seek to stem the flow of Asian technology companies listing via this route in the US. Singapore moved faster, with Vertex Venture Holdings and Novo Tellus Capital Partners among the first to have SPACs commence trading. In Hong Kong, prospective sponsors include consumer-focused private equity firm LionRock Capital.

Hong Kong SPACs must be at least HKD 1bn in size, while sponsors need to meet certain qualification criteria, and participation in SPAC offerings is limited to professional investors. The merged entity must also meet the same requirements that apply to all newly listed companies, which negates the speed advantage of a SPAC process over a traditional IPO.

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• Topics
• Greater China
• Consumer
• Technology
• IPO
• Hong Kong (China)
• SPAC
• Vision Knight Capital
• TMT