Artistic Alliance
The Rundown - Your weekly SPAC Recap (05/19/24)
Happy Sunday, Friends!
The last week of SPACs was packed with Mergers, Deals, and other announcements. Two SPAC deals include Chinese firms, including an Art Marketplace and a Struggling Chinese EV Maker. Also, A SPAC is taking an Ed-tech firm public, and SPACs could face a setback with a proposed buyback tax proposal. Read on to find out the latest about all things SPACs.
SPAC Deals Announced
Art Marketplace Tyfon to Merge with $GTAC in a $434 Million Transaction
Global Technology Acquisition I and Tyfon Culture Holdings, a Chinese art marketplace, have announced plans to merge, valuing the post-transaction enterprise at $434 million.
Chinese Art Marketplace Tyfon leverages an O2O business model to merge in-person art experiences with an online platform that enhances transaction efficiency, authentication, traceability, and data storage.
The company has become the largest painting trading intermediary in China by transaction value as of 2022, with $906 million in gross merchandise value transacted from 2021 to 2023 and over 110,000 registered users.
The pre-money equity value of Tyfon is set at $428 million, assuming a 57% redemption by the SPAC’s public shareholders and an expected $10 million PIPE investment.
The deal is anticipated to close sometime in the second half of 2024, post which the combined company will list on the Nasdaq stock exchange under the ticker “TFCI”.
$HUDA is Taking Chinese EV Maker Aiways Public in a $400 Million Deal
Chinese electric vehicle manufacturer Aiways is set to go public through a merger with SPAC Hudson Acquisition Corp, valuing Aiways at approximately $400 million.
The merger offers a crucial lifeline to Aiways, which had to stop production at its Shangrao plant last summer due to a severe EV price war in China that pressured automaker margins.
Despite current financial challenges, Aiways has a foundation in 16 European markets with its U5 and U6 models, and its Shangrao plant has the capacity to produce 300,000 EVs annually.
Aiways has been negotiating for months with investors to restart production of its current models and develop a new, affordable car aimed primarily at the European market as an export-only brand.
The company plans to base its headquarters in Europe to manage sales, marketing, and finance, while keeping manufacturing, procurement, and research and development primarily in China, according to a source familiar with the automaker's strategy.
$BFAC Merging With Ed-Tech Firm Class Over
SPAC Battery Future Acquisition is merging with Class Over, which provides edtech solutions and online live educational courses, in a deal that values the firm at an enterprise value of $135 million.
Founded in 2020 and based in New York, Class Over offers interactive online courses for K-12 students globally.
The company’s curriculum spans interest-driven classes to competitive test prep, emphasizing the development of creativity and problem-solving skills.
The SPAC secured non-redemption agreements last week, offering investors 100,000 Class B Shares for every 400,000 shares not redeemed in the first nine months, and an additional 10,000 founder shares monthly thereafter, up to a total of 130,000 founder shares.
Battery Future previously raised $300 million in an IPO in 2021, targeting businesses concentrated on sectors leading the transition from fossil fuels to electrification, including those in the battery value chain.
SPAC News
Buyback Tax Proposal Spells Trouble for SPACs
Special-purpose acquisition companies will not receive the hoped-for exemption from a new 1% tax on stock buybacks, according to a recent proposal from the Treasury Department.
The Treasury Department and IRS concluded that special rules for SPACs were unnecessary, subjecting them to the same regulations as other taxpayers.
Additionally, the regulations offer no transition relief for SPACs regarding payments for mergers or acquisitions, or for redemptions by SPACs established before the tax was enacted.
Furthermore, the regulations do not allow exceptions for stock redemptions under mandatory provisions or unilateral put options, which are commonly issued by SPACs.
They also do not extend the netting rule to de-SPAC transactions where the SPAC is not the acquiring corporation, including double dummy transactions.
$RFAI Files for $100 Million Initial Public Offering
RF Acquisition II has priced its initial public offering of 10 million units at $10 each, and the units are now trading on the Nasdaq under the ticker symbol RFAIU.
The new SPAC plans to focus on the deep technology sector in Asia, such as AI, quantum computing, and biotechnology. CEO and Chairman Tse Meng Ng, who also co-founded Ruifeng Wealth Management, leads the blank cheque firm.
EarlyBirdCapital is serving as the sole bookrunner for the deal. The sponsor's previous SPACA RF Acquisition had entered into a $1.2 billion merger with Singapore-based video game publisher GCL Asia in October 2023.
Meme of the Day
Investors Checking Berkshire Hathaway's Portfolio
