Grab To Go Public in US via US$39.6-Billion SPAC Merger

Source: patpitchaya, Shutterstock

Summary

  • The Singapore-based ride-hailing company will merge with special purpose acquisition company Altimeter Growth.
  • The transaction values Grab at an initial pro-forma equity value of approximately US$39.6 billion.
  • Grab will get approximately US$4.5 billion in cash proceeds.

Source: Pixabay

South Asia’s ride-hailing company Grab said April 13 it plans to become public on NASDAQ through a merger with special purpose acquisition company Altimeter Growth Corp. (NASDAQ: AGC).

The transaction values Grab at an initial pro-forma equity value of approximately US$39.6 billion. Grab said the merged company will be traded on NASDAQ under the symbol GRAB in the coming months.

The Singapore-based Grab was founded in 2012 and is backed by SoftBank Group Corp. The company operates in three segments - mobility, food delivery and payment solutions.

Grab’s gross merchandise value in 2020 more than doubled to US$12.5 billion from the 2018 figure while surpassing the pre-pandemic levels.

The company noted that it has a 72 percent market share in Southeast Asia’s ride-hailing segment and a 50 percent share in the online food delivery segment. In digital wallet payments, the company has a 23 percent market share.

Grab expects its total addressable market to exceed US$180 billion by 2025, up from approximately US$52 billion in 2020.

Source: Pixabay

Transaction

As part of the deal, the combined company will get approximately US$4.5 billion in cash proceeds. It includes more than US$4 billion from a fully committed private investment in public equity (PIPE). Grab noted the PIPE offering was upsized following significant interest from investors.

Funds managed by Altimeter Capital Management, LP committed US$750 million in the PIPE. Other investors include funds and accounts managed or advised by BlackRock, Counterpoint Global, T.Rowe Price Associates, Inc. and Fidelity International.

In addition, Altimeter will invest US$500 million, equivalent to the aggregate dollar amount of redemptions from Altimeter Growth’s shareholders.

The deal has been approved by the boards of Grab and Altimeter Growth. It remains subject to approval from shareholders and other customary closing conditions.

Altimeter Growth’s shares jumped 9.89 percent on Tuesday to close at US$15.33.


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