Pegasus Asia trumpets international ties; CEO says intention is to de-SPAC soon after IPO

PEGASUS Asia is leaning on its international ties to attract interest in its special purpose acquisition company (SPAC).

Chief executive Neil Parekh, in an interview with The Business Times, said the SPAC is seeing "strong investor interest" as it is the "only international sponsor" among the first round of SPACs.

"In terms of the quality of investors, there are some household name family offices, and some long-only institutions. It's quite a wide mix."

Pegasus was the second SPAC to register its prospectus with the Monetary Authority of Singapore on Thursday (Jan 13), coming shortly after Vertex Technology Acquisition Corp's registration in the afternoon.

Pegasus is sponsored by European asset manager Tikehau Capital as well as Financiere Agache, which is LVMH chief executive Bernard Arnault's family office. The 2 companies partnered on 2 SPACs in Europe last year.

The SPAC is offering 25.6 million units at a price of S$128 million, comprising an international placement and a public offer, similar to its preliminary prospectus. The international placement component has been increased to 25 million units, from 24.6 million in the preliminary prospectus; the public offer component has been reduced to 600,000 from 1 million previously.

Including the sponsors' commitment of 4.4 million units, the SPACs total market capitalisation would be S$150 million. The units are expected to commence trading on a "ready" basis at 9 am on Jan 21.

Each unit comprises 1 share and half a warrant per share, and the shares and warrants will begin separate trading from the 45th day from the listing date.

Tikehau manages over 30 billion euros of assets; Financiere Agache holds over 100 billion euros in assets. The sponsors have invested in companies such as JustCo, Uber and Bytedance. Financiere Agache is also a controlling shareholder in Christian Dior and LVMH.

Parekh said Pegasus Asia will be doing a market transaction for its business combination and will not be inserting a portfolio company into the SPAC - a principle the sponsor also holds to for its other global SPACs.

The sponsor group for Pegasus Asia includes 2 former senior bankers - Diego De Giorgi and Jean Pierre Mustier - who are currently operating partners in Tikehau's Pegasus Europe SPAC.

The sponsor group has committed to invest S$22 million in 4.4 million units at the time of the initial public offering (IPO), with additional investments also going towards the SPAC's at-risk capital. Including an unconditional forward-purchase agreement to buy units at business combination, the sponsor group would have invested some S$69 million in Pegasus Asia.

Pegasus Asia is seeking a target business with a proven business model that is scalable. Areas of focus include consumer-tech, fintech, prop-tech, insurance-tech, health-tech and digital services, primarily in the Asia-Pacific.

"We're looking for a company whose reason to exist is no longer under question. However, it is looking to use technology to disrupt its own business as well as the sector," Parekh said.

They have had "many people" reach out, he added, but Pegasus has been solely focused on the IPO at present.

"Do keep in mind, many companies want to be part of the Tikehau / LVMH ecosystem to go international," he said. "People go public not only for the money that comes with an IPO. They go public for visibility, they go public for having a currency to make acquisitions."

Parekh also believes that the first batch of Singapore SPACs would benefit from demand-and-supply dynamics.

"We hope to execute very soon after the IPO," he said. "Our intention is to de-SPAC (as soon as possible)."

He sees "many good opportunities" in South-east Asia that are in their target market capitalisation range and sub-sectors.

Noting that the sponsors are active investors, he said: "Assuming the de-SPAC is with a candidate ... of say approximately S$1 billion market cap, the intention is to grow that into a S$7-8 billion company over time."

Addressing the small public offer size, Parekh said SPACs are a new product and, historically, institutions have always been able to get up to speed more quickly than retail investors.

"I'm sure as the ecosystem develops, participation of retail will get bigger and bigger, as we have seen in Reits."

The public offer for Pegasus Asia's IPO opens at 9 pm on Thursday (Jan 13), and investors would have up till noon on Jan 19 to subscribe for units.