Hony looks to raise SPAC in Hong Kong

Everest Acquisition Corp. is a joint effort between Hony Partners Group and ABCI Capital, an offshore investment arm of Agricultural Bank of China (ABC). As the two promoters, they receive an equity interest in the SPAC for a nominal sum by subscribing to class B shares.

Hony Partners Group is the entity that accounts for the bulk of the GP commitment to each of Hony’s private equity funds. John Zhao, Hony’s founder and chairman, holds 49%; two managing directors at the private equity firm, Yonggang Cao and Minsheng Xu, hold the rest. Zhao is also chairman of the SPAC.

Hony sought to raise USD 300m through a SPAC offering in the US in early 2021 when various other Chinese private equity firms were doing the same. The mandate was to pursue healthcare and consumer deals. The structure was withdrawn 12 months later.

Everest Acquisition will target China-related assets across healthcare, consumer, and sustainability, which includes energy conservation and environmental protection, clean manufacturing, clean energy, and green infrastructure and services, according to a filing.

Hong Kong’s SPAC regime, which was unveiled in late 2021, is similar in structure to the US model. However, offerings must be at least HKD 1bn (USD 128m) in size, sponsors must meet qualification criteria, and participation in SPAC offerings is limited to professional investors. Once a SPAC completes a merger, the merged entity must meet the same requirements that apply to all newly listed companies.

The first SPAC to list in the territory was Aquila Acquisition Corp, which is sponsored by CMB International Asset Management. Earlier this month, it agreed to merge with ZG Group – the parent of PE-backed B2B steel trading platform Zhaogang – in a deal that values the target at about HKD 10bn.

Established in 2003, Hony has approximately USD 10bn in assets under management across 15 private equity funds. Other interests include real estate, mutual funds, hedge funds, and venture capital. The firm’s most recent flagship PE fund, comprising US dollar and renminbi-denominated tranches, closed at USD 2.6bn in 2016. A debut venture fund closed on USD 130m in 2020.

Hony has invested in more than 100 companies to date. Standout deals include CSPC Pharmaceutical, Simcere Pharmaceutical, I-Mab, Pharmplus, JinJiang Hotels, and ENN Natural Gas.

As of June 2023, the firm had generated a 1.99x multiple and a 25% IRR across all its funds. Distributions to paid-in (DPI) was 1.58x.

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• Topics
• Greater China
• IPO
• Consumer
• Healthcare
• Cleantech
• China
• Hong Kong (China)
• Hony Capital
• SPAC