In a move highlighting the increasing focus of technology-based firms in digital entertainment, Singapore Special Purpose Acquisition Companies (SPAC) is acquiring a live-streaming platform for up to $676 million. In its first purchase since being listed on the Singapore Exchange (SGX), the SPAC VTAC will acquire 17LIVE Inc, which operates Asia’s leading live streaming platform with over 50 million registered users. The deal is expected to close by the end of 2023, with the newly merged company set to operate under the brand name 17LIVE Group Ltd.
The deal will be financed by cash and debt, VTAC said in a statement. The pro-forma equity value of the proposed deal will be up to S$1.16 billion, VTAC added. The SPAC aims to grow by investing in one or more technology-focused, fast-expanding businesses that are scalable because of their cross-border potential and will target six investment themes: Cyber Security and enterprise Solutions, Artificial Intelligence, Consumer Internet and technologies, Financial Technologies, Autonomous Driving and New Energy Vehicles and Biomedical Technologies & Digital Healthcare.
VTAC is the first SPAC to buy a private firm since it was granted permission by SGX in 2021 to list such shell companies, known as SPACs, as part of its efforts to position itself as a hub for SPACs in Asia. Typically, SPACs raise funds through an initial public offering (IPO) and then look for targets to acquire. Once a suitable target is found, the SPAC will go through a business combination called a de-SPAC, where it will merge with the targeted firm, and its shareholders will own shares of the resulting company.
17LIVE’s business model is built around cultivating “LIVERs,” or live-streaming artists, empowering them to connect with their fans via live streaming. Its platform features real-time chatting, gifting, fan clubs, and content management support. 17LIVE had just over half a million average monthly active users in the first half of fiscal 2023 and counts Japan and Taiwan as its key markets.
Upon completion of the proposed deal, the new merged company will be named 17LIVE Group Ltd and trade on the SGX. Each VTAC share and warrant, converted to shares in the merged entity, is priced at S$5.75 each. The IPO was 36 times oversubscribed, with some 80% of the shares offered by the SPAC being allocated to institutional and accredited investors.
As a SPAC, VTAC will be subject to various rules and restrictions, including a 24-month moratorium on the sponsor’s shares and warrants, which can only be transferred or disposed of after the de-SPAC process. This is intended to ensure that the sponsors and their associates have a sufficient alignment of interest with the newly merged company in how it is run. The SPAC must also meet certain minimum market capitalization and other conditions.