Vertex Technology lodges preliminary prospectus for S$200m SPAC

VERTEX Technology Acquisition Corporation (VTAC), a special purpose acquisition company (SPAC) established by Vertex Venture, lodged a preliminary prospectus with the Monetary Authority of Singapore (MAS) on Thursday (Jan 6), in connection with a proposed offering of units.

The company is the first to lodge a preliminary prospectus for a Singapore Exchange (SGX) SPAC listing, following the introduction of a framework to list such vehicles last September.

According to the prospectus lodged to MAS Opera, the offering by VTAC will be for 11.8 million units at an offering price of S$5 per unit.

Of these units, 11.2 million are being offered by way of an international placement to investors, including institutional and other investors in Singapore and foreign institutional and selected investors outside the United States. There will also be a public offering of 600,000 units by way of public offer in Singapore.

The sponsor, Vertex Venture, will also invest in the initial public offering, and a wholly-owned subsidiary of the sponsor will subscribe for 6 million investment units at the offering price of S$5 per unit, raising S$30 million.

The sponsor also has "at-risk capital contribution for payment of offering expenses and operating expenses" of up to S$10 million, in the form of subscribing for private placement warrants.

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Vertex Venture is a Singapore-based global venture capital platform, with over 200 companies in its portfolio. The investment platform has over US$5.1 billion of assets under management, of which around US$3.7 billion is managed by global network funds with independent general partners.

At the same time as, but separate from the offering, cornerstone investors have also entered into cornerstone subscription agreements with VTAC to subscribe for an aggregate of 22.2 million cornerstone units at the S$5 offering price, to raise gross proceeds of S$111 million.

The cornerstone units will in aggregate constitute around 55.5 per cent of the post-offering share capital of the company, assuming over-allotment option is not exercised. Dymon Asia Multi-Strategy Investment Master Fund, Venezio Investments, Fullerton Fund Management Company, UBS Asset Management and Lion Global Investors are among the 13 cornerstone investors.

The market capitalisation of VTAC upon listing, based on the offering price of S$5 and the post-offering share capital of 40 million shares will be S$200 million.

Each unit will consist of 1 share, and 0.3 of a warrant per share, which will be issued at the completion of the offering. An additional right to 0.2 of a warrant per share will only be issued later to holders of shares (which have not been tendered for redemption) at or around the completion of the initial business combination.

All the gross proceeds raised from the offering, sponsor IPO investment units, and cornerstone units will be placed in an escrow account. This is above SGX's minimum requirements for at least 90 per cent of gross proceeds to be placed in the escrow account.

The proceeds may be used for the consummation of the initial business combination and in the payment of deferred underwriting commissions, VTAC said.

VTAC intends for its initial business combination to occur with one or more target businesses "at the forefront of technology transformation". The targeted investment themes include artificial intelligence, cybersecurity and enterprise solutions, consumer Internet and technologies, financial technologies, autonomous driving and new-energy vehicles, biomedical technologies and digital healthcare.

Following the completion of the initial business combination, VTAC has agreed to allot the sponsor with 10 million shares for a cash payment of S$25,000, as its promote shares. The promote is subject to certain time-based and price-based vesting conditions.

The final prospectus may be registered by MAS between 7 and 21 days from the date of lodgement of the preliminary prospectus, unless MAS extends the exposure period, Vertex Venture said in a bourse filing.

The offering will be made following the registration of the final prospectus. Anyone who wishes to acquire the units will need to make an application for the units in the manner set out in the final prospectus.

The offering and listing of VTAC on the SGX are subject to and conditional upon, among others, prevailing market conditions, Vertex Venture added.

Vertex Venture chief executive Chua Kee Lock will be non-executive chairman of VTAC. VTAC's CEO is Jiang Honghui, who has been seconded from Vertex Venture Management, a wholly-owned subsidiary of the sponsor.

The joint global coordinators, book runners and underwriters are Credit Suisse (Singapore), DBS Bank, and Morgan Stanley Asia (Singapore).

SPACs are shell entities formed by a group of investors known as sponsors who raise capital via an IPO. The shell company has a set timeframe to identify and acquire a target company - known as a business combination or de-SPAC - which will result in taking the target company public.

Apart from Vertex, other sponsors reported to be seeking a Singapore SPAC listing include European asset manager Tikehau Capital, and Singapore-based Novo Tellus Capital Partners.