Singapore SPAC to merge with the 'Spotify of the Middle-East'

A BLANK-CHEQUE company backed by Singapore-based Vistas Media is in talks to merge with music streaming service Anghami, in a deal that could value the Middle Eastern startup at over US$200 million.

Vistas Media Acquisition Company (VMAC), their special purpose acquisition company, which raised US$100 million in a public listing in August 2020, is finalising financing for the deal, according to people close to the matter. The deal could be announced as early as Wednesday

If successful, the merger would mark Anghami - whose existing backers include Emirates Integrated Telecommunications, Middle East Venture Partners and private equity firm Samena Capital - as one of the first Middle Eastern technology companies to list on the Nasdaq stock exchange in New York.

The transaction includes a combined PIPE (private investment in public equity) financing of US$40 million, including US$30 million from United Arab Emirates-based financial firm Shuaa Capital, and US$10 million from the parent of the SPAC sponsor, BT understands.

Anghami, Arabic for "my tunes", is the latest music streaming platform that plans to go public via a SPAC, as the music industry becomes increasingly attractive to alternative investment vehicles. Other similar companies in this space that were targeted by SPACs include Jay-Z's Tidal and Akazoo (which delisted from the Nasdaq in 2020).

Based in Abu Dhabi, Anghami has grown to become one of the region's most popular streaming platforms. Launched in 2012, it claims over 70 million users, and has more than 57 million songs available.

Representatives for Anghami, Vistas and Shuaa declined to comment.

According to people familiar with the company, the transaction could imply an initial pro-forma valuation of about US$220 million, or 2.5 times its 2022 estimated revenue. Spotify currently has a revenue multiple of about 6.5x.

The people said that about 81 per cent of Anghami's revenue is subscription-based, while 19 per cent comes from advertisements. They added that the company is expecting to have approximately US$142 million of cash on its balance sheet at closing to fuel its growth.

The merger is expected to complete in the second quarter of 2021.