Grab SPAC listing: Singapore’s Grab to go public in world’s biggest $40 bn SPAC merger

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SINGAPORE: Grab Holdings, the most important ride-hailing and meals supply agency in Southeast Asia, clinched a merger on Tuesday with special-purpose acquisition firm Altimeter Growth Corp securing a valuation of practically $40 billion and paving the way in which for a coveted U.S. itemizing.

The merger, the biggest blank-check firm deal ever, underscores the frenzy on Wall Street as shell corporations have raised $99 billion in the United States thus far this 12 months after a file $83 billion in 2020.

As a part of Singapore-based Grab’s settlement with the SPAC backed by Altimeter Capital, buyers similar to Temasek Holdings, BlackRock, Fidelity International, Abu Dhabi’s Mubadala and Malaysia’s Permodalan Nasional Bhd will take part in a $4 billion personal funding in public fairness providing.

Funds managed by Altimeter Capital will lead the funding with $750 million.

“Institutional investors looking for Asian consumer internet exposure are keen to diversify their allocation beyond a handful of companies,” mentioned Varun Mittal, head of rising markets fintech enterprise at consultancy EY.

Grab mentioned its choice to turn into a public firm was pushed by a robust monetary efficiency final 12 months.

The transactions validate Grab’s co-founder Anthony Tan’s technique of aggressively tapping development in new sectors and ramping up market share by pumping billions of {dollars} to localise its companies and make investments in high-growth economies.

Tan instructed Reuters the funds will likely be used to double down on the last-mile supply community and to bulk up its monetary companies enterprise, similar to digital financial institution and cellular funds.

The 39-year-old launched Grab as a taxi app in Malaysia in June 2012 with fellow Harvard Business School alumni Tan Hooi Ling, after which shortly took it regional.

The offers for Grab, which was valued at simply over $16 billion final 12 months, are an enormous win for its early backers similar to SoftBank Group Corp and China’s Didi Chuxing.

Reuters earlier reported that Grab would announce the deal on Tuesday.

Altimeter Growth and Grab will turn into fully-owned subsidiaries of a brand new holding firm, which is predicted to be valued at $39.6 billion on an preliminary proforma fairness foundation.

“Southeast Asia is one of the fastest growing digital economies in the world, with a population approximately twice the size of the United States. Yet online penetration for food delivery, on-demand mobility and electronic transactions are a fraction of the U.S. and China,” mentioned Brad Gerstner, founder and chief government officer of Silicon Valley-based Altimeter.

The transactions will present Grab with about $4.5 billion in money proceeds.

The offers, which have been permitted by the boards of each Grab and Altimeter Growth, are aimed to shut by July.

“Grab is now synonymous with Southeast Asia’s exciting growth story,” mentioned Greg Moon, managing associate at SoftBank Investment Advisers.

Grab attracted international consideration in 2018 when it acquired Uber’s Southeast Asia enterprise after a expensive five-year battle in return for a stake in itself.

Reuters reported in January that Grab, which has thus far raised about $12 billion, was exploring a U.S. itemizing.

“For us, it was about depth, it is highly liquid, it is large with global names, global investors,” Tan mentioned on why Grab select the U.S. markets for a list.

Grab’s agreed transaction will surpass electrical car maker Lucid Motors’ $24 billion deal struck with a SPAC in February.

BATTLEGROUND INDONESIA
With operations in eight international locations and over 400 cities, Grab is Southeast Asia’s most respected start-up.

Leveraging its ride-hailing enterprise, it has moved into meals and grocery deliveries, courier companies, digital funds, and is now making a push into insurance coverage and lending in a area of 650 million individuals.

The itemizing will give Grab further firepower in its predominant market of Indonesia, the place native rival Gojek is shut to sealing a merger with the nation’s main e-commerce enterprise, Tokopedia.

Grab can also be dealing with extra competitors from cash-rich, U.S.-listed Sea. Both Grab and Sea received digital financial institution licences in Singapore final 12 months.

Grab, whose web income surged 70% final 12 months, has but to flip worthwhile. The meals supply section grew to become its biggest enterprise as extra shoppers shift to on-line meals supply after the pandemic.

Grab reported adjusted web income of $1.6 billion in 2020 and forecasts this to rise to $4.5 billion in 2023. It expects to flip optimistic on an earnings earlier than curiosity, taxes, depreciation, and amortization foundation in 2023.

Evercore was the lead monetary advisor to Grab on the deal and JPMorgan and Morgan Stanley have been co-advisors.

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