Source: Prospectus
Source | Live reports
Data support | Jieli Trading Treasure APP
Abstract: VISION DEAL submitted a prospectus to the Hong Kong Stock Exchange on 15 February 2022 to be listed on the Main Board of Hong Kong, and is the sixth SPAC company in Hong Kong, with Wei Zhe, DealGlobe, Mr. Lou and Chuangfu Financing as the initiators, and intends to focus on Chinese high-quality companies specializing in smart car technology or with supply chain and cross-border e-commerce capabilities to benefit from the trend of domestic consumption upgrading.
S&TLiveReport has been informed that vision DEAL HK ACQUISITION CORP., a special purpose acquisition company, submitted a listing application on the Hong Kong Stock Exchange on 15 February 2022 for listing on the Main Board of Hong Kong. This is the first time that the company has submitted a listing application, the sponsors are Wei Zhe, DealGlobe, Mr. Lou and Chuangfu Financing, and the co-sponsors are Citi and Haitong International.
VISION DEAL is a Special Purpose Acquisition Company (SPAC) that was formed to merge operations with one or more companies. In identifying M&A targets for special-purpose acquisitions, we intend to focus our efforts on high-quality Chinese companies that specialize in smart vehicle technology or have supply chain and cross-border e-commerce capabilities to benefit from the trend of domestic consumption upgrading.
A number of macroeconomic factors and industry trends will continue to support China's smart car technology market and consumption upgrading trend. China's economy has not only grown strongly over the past decade, but government policies and technological advances are driving the growth of China's smart car technology market. In addition, we have witnessed the rise of Chinese companies benefiting from China's dynamic consumer market. Supported by strong domestic supply chain capabilities, Chinese consumer goods companies are becoming more and more recognized overseas.
In addition, as an international financial centre, Hong Kong's initial public offering market remains strong in 2021. As at 31 December 2021, the Hong Kong market was processing over 120 listing applications and remained one of the most popular listing destinations in 2022. As Hong Kong's capital market continues to benefit from supportive policies and regulations such as the recently introduced special purpose acquisition system under Chapter 18B of the Listing Rules, it is expected that high-growth and innovative companies and investors will continue to explore financing options and seek listing on the Stock Exchange.
Investment Highlights Offer Terms
Note: This offering is not open to the public.
Offerings, offerings and trading must be limited to professional investors (professional investors include individuals with a portfolio of at least HK$8 million; trust companies with assets of not less than HK$40 million; enterprises or partnerships 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
Investment highlights
The Promoter's unique portfolio of expertise in mergers and acquisitions, capital markets, and corporate investments and operations;
Industry expertise and track record in consumption upgrading and information technology;
The value creation capability of the M&A target of the special purpose acquisition company;
Strong ability to find targets and a rigorous review process; and management and operational capabilities complemented by a vast global network of relationships.
Company Information:
71 Fort Street, PO Box 500 Grand Cayman Cayman Islands KY1-1106
Hong Kong Address: 5/F, Manulife Plaza, 348 Kwun Tong Road, Kowloon, Hong Kong
View prospectus: Jieli Trading Treasure APP - New Stock Connect
M&A criteria
The following general guidelines have been developed to assess the M&A targets of potential special purpose acquisition companies:
Proven market leader.
Competitive product or service categories with market potential.
Reasonable valuations that correspond to solid financial performance.
Ethical, professional and visionary executives and senior management who are ready to meet their financial reporting and corporate governance obligations under the Listing Rules; and
Consumer and smart car technology companies that have the ability to leverage and benefit from our expertise and experience, public image and broad capital channels.
Corporate Structure
As at the date of this document, 90% of the Company's Class B shares are held by Vision Deal Acquisition Sponsor LLC, which is followed by VKC Management, DealGlobe and Mr. Lou holding 40%, 40% and 20% respectively. VKC Management is an investment holding company wholly owned by Mr. Wei.
The remaining 10% of the Company's Class B shares are held by Opus Vision SPAC Limited, an investment holding company wholly owned by Wealth Creation Finance.
Introduction of the promoter
The sponsors are Wei Zhe, DealGlobe, Mr. Lou and Chuangfu Financing
Wei
Mr. Wei has approximately 20 years of investment and advisory experience, including 10 years of experience as an executive of a multinational corporation and 10 years of private equity investment experience in the PRC. Prior to founding Jiayu Capital in June 2011, Mr. Wei served as Executive Vice President of Alibaba Group from November 2006 to February 2011 and served as the Chief Executive Officer of Alibaba Network Co., Ltd.
Mr. Wei's investment and advisory skills are evident from Jiayu Capital's track record. Jiayu Capital's AUM increased from US$1.2 billion to US$2.2 billion as of December 31, 2021. In addition, as at 31 December 2021, Jiayu Capital had invested in more than 80 projects, including a number of successful initial public offerings and M&A exits. Some of its well-known investments in China over the past decade, which have focused on consumption upgrading, include:
Bubble Mart International Holdings Limited (HKEX: 9992) ("Bubble Mart"), Jiayu Capital established a partnership with Bubble Mart through advisory services and was offered the opportunity to invest in Bubble Mart in early 2020.
Symol International Holdings Limited (HKEX: 6969) ("Smol"), Ka Yu Capital established a partnership with Smol in 2019 to obtain investment opportunities in 2019.
Anker Innovation Technology Co., Ltd. (Shenzhen Stock Exchange: 300866) ("Anker"). By providing consultancy services and establishing a partnership with Anker, Jiayu Capital was given the opportunity to invest in Anker in 2017 and 2018.
91 Wireless Network Limited ("91 Wireless"), through its consulting services, JiaYu Capital established a relationship with NetDragon, the then owner of 91 Wireless, and was given the opportunity to invest in 91 Wireless in 2012.
Mr. Wei also serves on the boards of a number of companies listed on the Stock Exchange, the New York Stock Exchange and the Shanghai Stock Exchange, most of which operate in the consumer and Internet sectors. These include non-executive directors of Jiangnan Buyi Co., Ltd. since June 2013, independent directors of Leju Holdings Limited, and independent directors of Shanghai Chenguang Stationery Co., Ltd.
DealGlobe
DealGlobe is a member company of E-Gs group, a cross-border boutique investment bank founded by Mr. Fung and strategically supported by outstanding entrepreneurs, companies and family offices. As at 31 December 2021, e-Boundary Group had executed 20 transactions, including advisory transactions with a total value of approximately US$3.5 billion and investment transactions of approximately US$60 million. Some of the well-known transactions of E-Boundary Group are related to the following companies:
Huiliang Technology Co., Ltd. (HKEX: 1860). Easy Boundary Group provides advisory services to Huiliang Technology Co., Ltd. to advise them on strategic corporate and financial matters.
AppLovin, in 2017, Easy Boundary Group assisted Orient Hongtai Capital ("Oriental Hongtai") in investing in AppLovin by arranging transactions and key terms.
Shenzhen Far East Hospital Group ("Far East Hospital"), which acted as financial advisor to Shenzhen Far East Maternity Hospital in the sale of a controlling interest in Shenzhen Far East Maternity Hospital to KaiWei Medical Investment Group (Shenzhen) Co., Ltd. in 2020;
Kirin Software Limited ("Kirin Software"), in 2020 and 2021, E-Boundary Group assisted a private equity investor in making a minority investment in Kirin Software.
In addition, DealGlobe was incorporated in the UK in December 2013 and has been authorised and regulated by the Financial Conduct Authority of the UK since October 2016 to carry on institutional finance business in the UK ("FCA Licence").
DealGlobe is also permitted to advise on investments (except for pension transfers and retirements). Therefore, DearGlobe has an overseas certification similar to that of a Type 6 (Advising on Institutional Financing) or Type 9 (Providing Asset Management) licences issued by the SFC.
Mr. Lou
Mr. Lou is an executive director and chief strategy officer of the Company and is a long-term business partner of Mr. Wei. He is an independent investor with extensive experience in the areas of private equity, venture capital, mergers and acquisitions, leveraged buyouts and PIPE transactions, covering the technology, media and telecommunications, financial and business services industries. Mr. Lou has held various positions in private equity firms and investment banks, including Goldman Sachs in San Francisco, Apax Partners in New York and Hillhouse Capital in Beijing. During his tenure at Goldman Sachs, Mr. Lou worked on M&A transactions focused on technology-related businesses. While at ApaxPartners, Mr. Lou was primarily involved in identifying and evaluating investment opportunities and topics, building financial models and conducting due diligence. While at Hillhouse Capital, Mr. Lou focused on private equity transactions in China.
Wealth Creation Financing
Chuangfu Capital was incorporated in Hong Kong in January 2014 and is a SFC-licensed corporation capable of engaging in Type 1 (securities trading) and Type 6 (advising on institutional financing) under the Securities and Futures Ordinance since August 2014. Since October 2019, Wealth Chuang Fu Financing has also been qualified as a qualified sponsor and can sponsor an initial public offering in Hong Kong.
For the nine months ended 30 September 2021, Wealth Chuangfu Financing ranked second and third respectively among financial advisors in the Hong Kong small market and the medium-sized market in Hong Kong by number of transactions. In terms of capital market fund-raising transactions, Chuangfu Financing has successfully completed 46 initial public offering and secondary offering transactions of listed and private companies since its inception, with a total transaction size of approximately US$1.5 billion.
Chuangfu Finance is a group company of Chuangfu Financial Group Limited ("Chuangfu Financial Group"), a professional financial group headquartered in Hong Kong, providing a variety of financial services. Chuangfu Financial Group mainly focuses on institutional financing, capital market transactions, asset management, securities brokerage and margin financing business. In addition to being a SFC-licensed corporation that can engage in Type 1 (securities trading) and Type 6 (advising on institutional financing) regulated activities under the Securities and Futures Ordinance through Wealth Creation Finance, Wealth Wealth Financial Group conducts asset management activities through its group company, Wealth Creation Capital Management Limited ("Wealth Wealth Management"), which is a SFC licensed corporation that can engage in Type 9 (provision of asset management) regulated activities under the Securities and Futures Ordinance.
The securities brokerage and margin financing business is carried out by Chuang fu Securities Limited, a group company of Chuang Fu Financial Group, which holds a SFC license to engage in Type 1 (securities trading) regulated activities.
Management situation
The Board comprises ten Directors, including three Executive Directors, three Non-Executive Directors and four Independent Non-executive Directors. The Directors' Profile is set out below:
Chairman of the Board of Directors
Wei Zhe, aged 51, is the Chairman of the Board and an Executive Director. He was nominated by VKC Management as a member of the Board of Directors.
He has approximately 20 years of investment and consulting experience, including 10 years of experience as a chief executive of a multinational corporation and 10 years of private equity investment experience in China. He is the founding partner and chairman of Jiayu Capital, formerly the executive vice president of Alibaba Group and the chief executive officer of Alibaba Network Co., Ltd., and the president and chief executive officer, chief financial officer and chief executive officer of B&Q (China) Home Furnishing Co., Ltd. He is the General Manager and Head of The Investment Banking Department of Orient Securities Co., Ltd. and the Corporate Finance Manager of Coopers & Lybrand. He has also served as a director of a number of private companies and listed companies on the Stock Exchange, the New York Stock Exchange and the Shanghai Stock Exchange, most of which are engaged in the consumer and Internet sectors, and mr. Wei was selected as one of the "Best CEOs in China" by FinanceAsia magazine in 2010. He has accumulated experience and is familiar with innovative companies in the consumer and Internet sectors in the PRC. He obtained a bachelor's degree in international business management from Shanghai Overseas Chinese University.
Executive Director
Mr. Feng, aged 36, is an executive Director and Chief Executive Officer. He has 10 years of experience in investment advisory and private equity, specializing in cross-border M&A and investment. Mr. Fung is the founder, chairman and chief executive officer of E-Boundary Group, a cross-border boutique investment bank. Previously worked in summit Partners London. He has been the President of the Shanghai Industrial and Information Industry Mergers and Acquisitions Association since January 2022. In January 2017, he was awarded the "Best Contribution Award for China-UK Relations – Rising Star Award in the Field of Transnational Investment" by Hurun Report. He holds a bachelor's degree in business administration from Shanghai University and a master's degree from Hector European Business School.
Mr. Lou, aged 40, is an Executive Director and Chief Strategy Officer. He has extensive professional experience in investment, investment banking and private equity in the technology, media and telecommunications (TMT), financial and business services sectors. Worked as an investment professional at Hillhouse Capital. Investment professional at Apax Partners in New York and investment banker at Goldman Sachs. Received a Bachelor of Management degree from Manlong College, USA.
Mediation team
According to the statistics of Jieli Transaction Treasure, there are 8 intermediary teams in Vision Deal HK Acquisition Corp., including 2 sponsors, and nearly 10 sponsored projects have performed well; 2 corporate lawyers have a total of 2, and the comprehensive project data is average. Overall, the historical data of the intermediary team is better.
Source: Jieli Trading Treasure APP
Sponsor underwriting historical results
Citi's recent sponsorship break rate is 20.37%, and Haitong International's recent sponsorship break rate is 21.67%
Both are participating in the issuance of Hong Kong SPAC companies for the first time.
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 entities to complete the listing.
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 a warrant): The exercise price must be at least 15% higher than the offer price of the SPAC shares at the time of the 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 warrant is not required 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.
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 time2019.7.30
New code: NFH
The size of the fundraising is US$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 market2017.11
M&A time2019.8.23
Code: LGC
The fundraising scale is 300 million US dollars
Subsequently, the Hong Kong Stock Exchange also issued relevant rules for consultation and officially implemented them on January 1 this year. Since then, several SPAC companies have applied for listing, as follows: