Source: Prospectus
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Abstract: AQUILA filed a prospectus with the Hong Kong Stock Exchange on 17 January 2022 for listing on the Main Board of Hong Kong, making it the first SPAC company in Hong Kong
S&TLiveReport has been informed that AQUILA ACQUISITION CORPORATION (hereinafter referred to as "AQUILA") submitted a listing application on the Hong Kong Stock Exchange on 17 January 2022 for listing on the Main Board of Hong Kong. This is the first time the company has submitted a listing application, with co-sponsors Morgan Stanley and CMB International and sponsors CMB International Asset Management Limited and AAC Mgmt Holding Ltd.
AQUILA is a Special Purpose Acquisition Company (SPAC) that was established to merge operations with one or more companies. Focus on technology-enabled companies in "new economy" sectors in Asia ( particularly China ) , such as green energy , life sciences and advanced technology and manufacturing
The promoters are CMB International Asset Management Limited ("CMB International Asset Management") and AAC Mgmt Holding Ltd ("AAC Mgmt Holding"). CMB Asset Management and AAC Mgmt Holding hold 90% and 10% of the outstanding shares of CMBI AM Acquisition Holding LLC respectively, while CMBI AM Acquisition Holding LLC holds all of the issued Class B shares. Class B shares will not exceed 20% of the total number of issued shares on the listing date.
Note: The offering is not open to the public.
Offerings, offerings and trading must be limited to professional investors (professional investors include individuals with a portfolio size of at least HK$8 million; trust companies with assets of at least HK$40 million;
A business or partnership with a portfolio of not less than HK$8 million and assets of not less than HK$40 million. Retail investors can only participate after SPAC completes the acquisition of assets.
Terms of Sale
Investment highlights
1. Hong Kong's first SPAC, which has a certain demonstration effect;
2. Establishing a leading industry relationship with CMB International Platform through China Merchants Bank, supplemented by comprehensive research strength, will be favored by the M&A target of potential special purpose acquisition companies;
3. The cross-business alliance between China Merchants Bank and CMB International platform will provide the company with a series of unique M&A objectives;
Company Information:
Company address: PO Box 309, Ugland House Grand Cayman, KY1-1104 Cayman Islands
Hong Kong Address: 46/F, Crown Tower, 3 Garden Road, Central, Hong Kong
View prospectus: Jieli Trading Treasure APP - New Stock Connect
Acquisition Criteria
In line with the Company's business strategy, the Company has developed the following general guidelines that the Company deems important in assessing potential M&A targets for special purpose acquisitions
Leading position in the new economy industry: The company intends to acquire the industry leader with major barriers to entry in the new economy industry and technology empowerment as the business model.
Favorable long-term growth prospects: The Company intends to combine M&A objectives with a special purpose acquisition of a company with a rapidly growing business with long-term growth potential or operating in an expanding market with significant market potential. The Company intends to seek opportunities to acquire businesses with diversified revenue growth drivers established in their respective market segments, as well as businesses that can capture market trends and market potential to achieve attractive and long-term growth.
Differentiated Value Proposition and Technical Barriers: The Company intends to combine its M&A objectives with a special purpose of acquiring a company that offers one or more differentiated products or services. Sources of competitive differentiation may include brand names, customer reputations, patents, technical expertise, know-how and other IP-related assets, as well as relevant talent and people. Companies prefer companies that enjoy both competitive advantages and technical barriers that are difficult to replicate than those that only benefit from superior business models.
Traceable financial track record, ethical, professional and responsible management and strong environmental, social and governance values: The Company intends to combine with special purpose acquisition objectives with high environmental, social and governance ("Environmental, Social and Governance") standards, backed by a management team with appropriate experience, expertise and foresight and, like the Company, the goal of creating long-term value for shareholders.
Sponsor profile
The Company's sponsors are CMB International Asset Management Limited ("CMB International Asset Management") and AAC Mgmt Holding Ltd ("AAC Mgmt Holding"). CMB Asset Management and AAC Mgmt Holding hold 90% and 10% of the outstanding shares of CMBI AM Acquisition Holding LLC respectively, while CMBI AM Acquisition Holding LLC holds all of the issued Class B shares.
CMB Asset Management is an asset management company wholly owned by CMB International Capital Limited ("CMB"), a wholly owned subsidiary of China Merchants Bank ("CMB"). CMB Asset Management aims to achieve stable investment returns over the long term. As at 31 December 2021, CMB International Asset Management and CMB International Shenzhen had a combined asset under management of over US$30 billion (of which CMB International Asset Management alone had an AUM of more than HK$25 billion) and achieved an investment return multiple of approximately 2.9 times from 2015 to 2020.
AACMgmtHolding's shareholders include members of the Company's management team and advisory board, as well as all executive directors of the Company. The company's team members have deep investment and consulting experience and a proven track record of investing in companies in different industries at different stages of growth. All executive directors and one non-executive director of the Company are licensed by the SFC to carry out Type 9 (Asset Management Provision) regulated activities for CMB International Asset Management. In addition, they were all nominated as directors by CMB International Asset Management.
Management situation
An advisory board has been established. The Advisory Board is expected to provide business insights on:
(i) in search of a potential M&A target for a special purpose acquisition company;
(ii) when assessing the M&A objectives of a potential special purpose acquisition company
(iii) when committed to creating additional value for the business it acquires
Mr. Zhao Ju, aged 57, is the chairman of the Advisory Board, the Chief Executive Officer of CMB International and the Chief Investment Officer of China Merchants Bank. He was Vice Chairman of the Asian Investment Banking Division at UBS Group ("UBS") and was responsible for the overall business of UBS China. He has also worked for China Construction Bank, Deutsche Bank and China Galaxy Securities Corporation Limited. He holds a bachelor's degree in economics from Tsinghua University and a master's degree in business administration from Peking University. He is currently the President of the Tsinghua Alumni Association in Hong Kong.
Mr. Wang Hongbo, aged 52, is a member of the Advisory Board, chief investment officer of CMB International and a key member of the Investment Committee, responsible for CMB International's overall alternative investment strategy, including private equity investments. He is a director of CATL New Energy Technology Co., Ltd. and the vice chairman of Innosec (Suzhou) Technology Co., Ltd. He was previously the Managing Director of TCL Group Co., Ltd. in the investment department and TCL Capital, a wholly-owned subsidiary. He is a fellow member of the Association of Chartered Certified Accountants and was named "Top 10 Private Equity Investors of the Year" by Zero2IPO Group in 2020 and 2021.
Dr. Zhou Kexiang, aged 57, is a member of the Advisory Board, Managing Director of CMB International, Chief Investment Officer of CMB International Shenzhen and Head of CMB International's Healthcare Investment Team. A number of companies hold senior positions such as BIOSET and Apollomics, Inc. He was the Managing Director of China Merchants Capital and the founding partner of China Merchants Capital Medical Fund. Yu Baiyunshan Pharmaceutical served as the deputy general manager. He received his M.D. degree from Peking University in June 1993
The Board comprises eight Directors, including three Directors and two Non-executive Directors and three Independent Non-executive Directors
Mr. Jiang Rongfeng, aged 45, is the Chairman of the Board and chief executive officer. He is the Managing Director of CMB International and the General Manager of the Asset Management Department and a key member of the Investment Committee, responsible for CMB International's offshore alternative investment business in China, including private equity investments. He was the Chief Executive Officer of China Merchants Asset Management (Hong Kong) Limited. He received a bachelor's degree in economics from Peking University in China in July 1998 and a master's degree in business administration from Columbia Business School in May 2008. He is a member of the executive of CMB International Asset Management Limited and joins the Board of Directors.
Mr. Ling Yao, aged 40, is an Executive Director and Chief Financial Officer. He is the Managing Director of CMB International and head of investor relations at CMB International Asset Management, responsible for investor relations and capital raising for CMB International's alternative investment products in the areas of private equity, private debt, direct investment, co-investment and open markets. More than 13 years of experience in the financial industry. Previously head of investor relations at CMC Capital. Worked in investor relations at CITIC Industrial Investment Fund Management Limited. He received a Bachelor of Science degree in Electrical Engineering and a Master of Science degree in Telecommunications from the University of Maryland, Park. He is a member of the executive of CMB International Asset Management Limited and joins the Board of Directors.
Ms. Le Di, aged 31, is an Executive Director and Chief Operating Officer. He is the Vice President of CMB International and is responsible for the project investment of CMB International Overseas Fund. He previously worked for Daiwa Sumitomo Investment Advisory (Hong Kong) Limited and China Merchants Asset Management (Hong Kong) Limited. He holds a bachelor's degree in economics from the University of California, Irvine and a master's degree in economics from the University of Hong Kong. He is a member of the executive and joins the Board of Directors of CMB International Asset Management Limited.
Sponsor underwriting historical results
Morgan Stanley's recent break rate is 29.25%, and CMB International's recent break rate is 31.03%, because the company did not have the first SPAC, so neither has a previous history of SPAC issuance
Source: Jieli Trading Treasure APP
Introduction to SPAC
Special Purpose Acquisition Company (SPAC), also known as "blank check company", is the establishment of a shell company to raise funds, and then through the acquisition of the target company to help the target company to achieve the listing
SPAC is different from the previous backdoor listing, this shell is cleaner. It is not listed in the form of shell purchase, but first shell and raise funds, and then merge the target company within the specified time, and finally make the target company successfully listed. By listing by SPAC, the target company only needs to merge with the listed SPAC listed entity, that is, the listing is completed.
Compared with traditional IPOs, SPAC has the following advantages:
Short listing time: After SPAC determines the investment target, the target company's curve listing takes only 3 to 6 months. SPAC is fundamentally an M&A transaction, and the listed company saves the cumbersome and lengthy listing process in the traditional IPO.
Low listing costs: Underwriter fees generally account for 5%-7% of the company's traditional IPO issuance revenue, and through the SPAC listing model, promoters can help listed companies share nearly half of the underwriting expenses.
Low listing threshold: Many unprofitable emerging technology companies are screened outside the traditional IPO, compared to the SPAC listing threshold is lower, more companies can complete the listing, increasing market liquidity.
Hong Kong Stock Exchange (HKEX) (00388. HK) SPAC listing system has been officially launched. In the context of the return of Chinese stocks, the primary role of SPAC is to increase the overall market capacity and help more innovative enterprises to obtain financing through listing in Hong Kong.
Judging from the relevant regulations on the listing of SPAC issued by the Hong Kong Stock Exchange, it is more stringent than the US SPAC.
In terms of promoters: HKEX requires at least one SPAC promoter to be a company holding Type 6 (advising on institutional financing) and/or Type 9 (providing asset management) licences issued by the SFC. In addition, at least one promoter must own at least 10% of the shares of the SPAC company.
In terms of fundraising amount and issue price: The Stock Exchange requires that the total amount of funds raised by SPAC companies in their initial offering is at least HK$1 billion. The issue price per share is at least HK$10, and the trading units and subscription amount of its SPAC shares are at least HK$1 million.
Participants: Not all investors can participate in SPAC trading. The Hong Kong Stock Exchange stipulates that the initial public offering of SPAC in Hong Kong is only for professional investors, and only professional investors can trade SPAC securities until the SPAC M&A transaction is completed.
SPAC Warrants: (i.e. warrants issued by SPAC, not to initiate warrants): The strike price must be at least 15% higher than the offer price of the SPAC Shares at the time of initial listing; the exercise period does not commence until after the completion of the SPAC M&A transaction, and the maturity date of the SPAC warrants does not have to be at least 1 year and not more than 5 years from the date of completion of the M&A transaction.
PIPE: Before the merger between SPAC and the target M&A company is completed, HKEx requires SPAC to obtain funds from independent foreign PIPE (private equity fund) investors to complete the SPAC M&A transaction. All PIPE investments must be professional investors and the funds raised must be a percentage of the agreed SPAC M&A valuation shown in the table below, with at least 50% of them coming from at least three senior investors.
Recent SPAC market situation
The number of SPAC listings around the world continues to rise, and according to data platform SPAC Track, more than 50 SPCs were listed every month in the fourth quarter of last year, with an average fundraising amount of $10.776 billion, more than double that of the second and third quarters.
Last year, about 612 SPAC listings were made in the United States, a significant increase of more than 1.46 times year-on-year, and the amount of funds raised soared by more than 90% year-on-year to about $161.514 billion, breaking the US$160 billion mark. The first quarter of last year continued the warm atmosphere of 2020, with a total of 298 SPAs listed, raising $98.731 billion.
On 2 September 2021, the Singapore Stock Exchange (SGX) officially issued the Main Board Listing Rules for Special Purpose Acquisition Companies (S PACs).
On 24 December 2021, Vertex Technology Acquisition Corporation Ltd (VTAC), a special purpose acquisition company registered in the Cayman Islands by Vertex Venture Holdings, a subsidiary of Temasek, is eligible to be listed on the Main Board of the Singapore Exchange. Became the first SPAC to be listed on the SGX.
Subsequently, the Hong Kong Stock Exchange also issued relevant rules for consultation and officially implemented them on January 1 this year. Aquila Acquisition Corporation, which has applied for listing, is the first company to go public under the new rules.
Chinese companies have never lagged behind in terms of sensitivity to international capital markets. The following are two classic cases of Chinese companies going to SPAC in the United States
1. Former Financial Secretary of Hong Kong, Leung Kam-sung, acquired New Frontier and Fosun Pharma in the acquisition of United Family,
SPAC Corporation (United Family)
• Time to market2018.6.28
• M&A time 2019.7.30
• New code: NFH
• Raised $287.5 million
2, A share of public relations and marketing companies blue focus, the United States SPAC is a failure, SPAC company (Legacy)
• Time to market 2017.11
• M&A time 2019.8.23
• Code: LGC
• Raised $300 million