SoftBank-backed Grab agrees to deal to go public in world's largest SPAC merger

4 weeks ago 16

Southeast Asia's ride-hailing elephantine Grab announced Tuesday it is acceptable to spell nationalist done a SPAC merger with Altimeter Growth Corp., successful a woody that values the institution astatine $39.6 cardinal — the largest blank-check merger to date.

Grab says it intends to database connected the Nasdaq nether ticker awesome GRAB pursuing the deal's completion.

Special intent acquisition companies are ammunition companies acceptable up to rise superior to get backstage companies. A SPAC listing bypasses Wall Street's accepted IPO process. Altimeter Growth's banal roseate much than 8% successful premarket trading aft the announcement, from its erstwhile adjacent of $13.95 a share.

As portion of the deal, SoftBank-backed Grab volition person astir $4.5 cardinal successful cash, which includes $4 cardinal successful a backstage concern successful nationalist equity arrangement, managed by BlackRock, Fidelity, T. Rowe Price, Morgan Stanley's Counterpoint Global money and Singapore's sovereign wealthiness money Temasek. PIPEs are mechanisms for companies to rise superior from a prime radical of investors that marque the last marketplace debut imaginable done their financing.

"I retrieve years agone erstwhile we were talking to investors, immoderate folks didn't adjacent cognize wherever Southeast Asia was connected a map," Grab co-founder and CEO Anthony Tan said Tuesday connected CNBC's "Squawk Box."

"So, contiguous arsenic we denote what is expected to beryllium the largest U.S. equity offering successful Southeast Asia ... it shows validation of the tremendous offering close present successful this region, and that the 'super app' strategy works."

Grab, ranked No. 16 connected past year's CNBC Disruptor 50 list, delivers an array of integer services specified arsenic transportation, nutrient delivery, edifice bookings, online banking, mobile payments and security services from its app — frankincense the "super app" title. It operates successful astir of Southeast Asia, serving much than 187 cardinal users successful implicit 350 cities crossed 8 countries.

While SPACs person go a hot concern vehicle on Wall Street, they're besides gaining traction successful Asia with six regional-focused SPAC companies that person collectively raised $2.7 cardinal frankincense acold successful 2021.

But successful the archetypal 4th this year, superior raised by blank-check firms similar Altimeter has already outpaced 2020's full issuance. It has not lone drawn the attention of the U.S. Securities and Exchange Commission, but besides investors who are fearful of a marketplace bubble.

Still, caller deals proceed to flood the marketplace — much than 100 successful March alone, according to SPAC Research.

"We recovered this was the amended mode to IPO," Tan said Tuesday of the determination helium claims his institution has been weighing implicit the past year. "They [Altimeter] committed much than 15% of our PIPE, and that shows existent committedness ... we've been capable to unafraid a world-class, day-one headdress array of each investors" progressive with the company.

While Grab's merger remains grounds setting, Boston-based biotech institution Ginkgo Bioworks, ranked No. 44 connected past year's CNBC Disruptor 50 list, is said to beryllium considering an arsenic monolithic $20 cardinal blank-check merger of its own, according to Bloomberg.

Throughout the pandemic, Southeast Asia saw a surge successful the usage of integer services similar e-commerce, nutrient transportation and online payments. As galore arsenic 40 cardinal radical successful six countries crossed the portion — Singapore, Malaysia, Indonesia, the Philippines, Vietnam and Thailand — came online for the archetypal clip successful 2020, according to a study from Google, Temasek Holdings and Bain & Company.

Still, Covid-19 has forced determination backstage marketplace decacorns (start-ups valued astatine much than $10 billion) to chopped unit and rethink what volition specify a ascendant ace app suite of on-demand services. It has besides intensified the competitory scenery successful an already-saturated marketplace that has proven hard to crook a profit.

After a play of aggravated and costly contention by Uber to predominate thrust sharing successful galore markets, it sold its Southeast Asia concern to Grab 3 years agone successful instrumentality for a involvement successful the company.

"Even successful the toughest times during Covid, we've been capable to pivot our operator proviso to different jobs," Tan said Tuesday. "There's nary 1 state that makes up much than 35% of our full revenues, truthful having that resilience and determination diversification has truly helped us."

In January, Reuters reported that Grab's nett gross had grown 70% twelvemonth implicit year, recovering to pre-pandemic levels with its ride-hailing concern breaking adjacent successful each operating markets, including its largest, Indonesia.

Grab and Indonesia-based rival Gojek were reportedly adjacent to finalizing a merger of their ain precocious past year.

Reuters reported past week that Gojek — which ranked No. 10 connected past year's CNBC Disruptor 50 database — is present successful precocious talks with Indonesian e-commerce person Tokopedia for an $18 cardinal merger, up of a imaginable dual listing successful Jakarta and the U.S.