Southeast Asian industrial technology buyout fund Novo Tellus Capital Partners listed its special purpose acquisition company (SPAC) in Singapore on Thursday (Jan 27), marking the third such IPO this month as the country seeks to become a hub for SPAC listings.
The trio of SPAC listings in Singapore comes almost a year after a frenzy of debuts of blank-cheque firms in the United States, which was stalled when regulatory changes and poor returns affected investor sentiment.
Novo Tellus Alpha Acquisition, which raised S$150 million (US$111 million), traded at S$4.96 versus its initial public offering (IPO) price of S$5 per unit. Each unit comprises one Class A share and one half of a warrant exercisable at S$5.75 per share.
SPACs, or shell firms, raise money on stock markets to buy private companies, effectively bringing those businesses to markets in shorter time frames and often stronger valuations.
At a listing ceremony on Thursday, Novo Tellus Alpha Acquisition chief executive Loke Wai San said structural change in supply chain trends would benefit industrial and technology companies in the region. He also said Singapore was a key venue to list SPACs.
“We would be looking at companies in the S$500 million to S$1 billion range,” Loke, also the CEO of Novo Tellus, told Reuters last week.
He said investors had “expectations of stable growth, profitability and not hyper growth and huge losses” for the SPAC’s target group of industrial companies.
Earlier this month, Vertex Technology Acquisition Corp, sponsored by a unit of Singapore state investor Temasek Holdings, raised S$200 million in the city.
Next to list was a S$170 million SPAC backed by European asset manager Tikehau Capital and a holding firm of LVMH CEO Bernard Arnault.
Hong Kong is also allowing SPAC listings from this year but bars participation from retail investors.
Novo Tellus’ SPAC IPO was heavily oversubscribed. Sponsored by Novo Tellus PE Fund 2, the IPO secured 13 cornerstone investors, including Malaysia’s Affin Hwang Asset Management Bhd and an indirect, fully owned subsidiary of Temasek.
Credit Suisse and DBS were the joint issuer managers and joint global coordinator of the IPO.