Primavera Capital Acquisition, a special-purpose acquisition company (SPAC) formed by Beijing-based private equity firm Primavera Capital Group, has filed with the US SEC to raise up to $300 million in an initial public offering (IPO).
The filing further adds to the fundraising frenzy involving Asia-focused SPACs — companies without operations formed only to raise capital to acquire other businesses — that are looking to acquire Southeast Asia’s tech, healthcare, and fintech startups.
In its filing, the Hong Kong-based SPAC said it intends to offer 30 million units at $10 each, with each unit consisting of one share of common stock and one-half of a warrant, exercisable at $11.50.
The company said it may raise an additional $80 million at the closing of an acquisition, pursuant to a forward purchase agreement with Aspex Management and Sky Venture Partners. Aspex Management is a Hong Kong-based investment manager focused on pan-Asian equity investing, while Sky Venture is a Chinese investment management group.
At the proposed deal size, Primavera Capital Acquisition would command a market value of $395 million. It plans to list on the NYSE under the symbol PV.U.
Focus on China, consumer firms
The SPAC intends to focus on global consumer companies with a significant China presence or a compelling China potential.
“We believe the economic and market dislocation resulting from the COVID-19 global pandemic has significantly broadened our opportunity, by putting additional pressure on many consumer businesses, which were already facing challenges prior to the pandemic,” Primavera Capital Acquisition said.
The SPAC’s sponsor, Primavera Capital, is a private equity firm that manages both RMB- and USD-denominated funds for institutions, corporations, and families in China and around the world. Its investments cover growth capital, buyout and control deals, and special situations in China.
The firm’s portfolio includes Spring Education, pre-IPO investments into Alibaba, Ant, and other key pillars within the Alibaba ecosystem, ByteDance, Kuaishou, Didi Chuxing, Zuoyebang, Junlebao Dairy, Laobaixing Pharmacy, and Xingsheng Selected.
SPACs target Asian startups
Primavera Capital Acquisition now joins a growing list of SPACs that are looking to acquire startups in Asia. The biggest SPAC focused on the region is Bridgetown Holdings, which is backed by Hong Kong tycoon Richard Li and venture capitalist Peter Thiel.
Bridgetown, which raised $595 million, is reportedly considering a potential merger with Indonesia’s e-commerce giant Tokopedia in a deal that could value the unicorn at $8 billion to $10 billion.
Thiel and Li are now in the market seeking to raise $200 million for a second blank cheque company.
Vickers Vantage, a Singapore-based blank cheque company formed by venture capital firm Vickers Venture Partners, also announced the pricing of its $120-million SPAC offering, comprising 12,000,000 units at $10 per unit.
Tiga Acquisition and Aspirational Consumer Lifestyle Corp, both Singapore-based, have also filed to raise $200 million and $225 million IPO in the US, respectively.
Another Southeast Asia-focused blank cheque company, Provident Acquisition Corp, also filed in December to raise up to $200 million in a US IPO, while Poema Global Holdings, a Europe and Asia-focused SPAC, secured $300 million to invest in technology companies.
Globally, a total of 248 SPAC IPOs raised $83 billion in 2020, according to IPO Insider.
SPACs typically acquire firms as quickly as four to five months. They are given up to two years to seek targets. If they cannot fulfil that mandate, they will have to return all the money to the public shareholders.