Singapore-listed Vertex Technology Acquisition Corp., a special purpose acquisition company, is set to become the city-state’s first blank-check firm to acquire a target, with a proposed merger with Taiwanese live streaming platform 17Live Inc. The deal, valued at S$925.1 million ($676 million), was announced by Vertex in a statement on Monday.
The move is the company’s entry into the blank-check craze, which has been gaining traction in global financial markets. The agreement paves the way for 17Live Inc. to become a publicly listed entity on the SGX-ST following the proposed business combination.
The proposed business combination is estimated to have a pro forma equity value of up to SGD 1,161 million ($847.56 million), indicating the substantial scale of this merger. Going public on SGX-ST is anticipated to invigorate 17Live’s ongoing business momentum as a leading pure-play live-streaming platform.
The move will also catalyze new business avenues like V-Liver and regional expansion into high-growth markets, notably Southeast Asia and the United States.
The introduction of various incentive shares to be issued to eligible shareholders of VTAC and 17LIVE, as well as the management of 17LIVE and new PIPE (private investment in public equity) investors.
VTAC is optimistic about securing the necessary approvals for the merger by the end of 2023. Upon approval, the company is slated to change its name, becoming 17Live Group, and will be listed on SGX’s mainboard.
“We are thrilled to work with the 17Live team as they continue to break new ground in the evolving consumer-internet space as an innovative and cutting-edge market leader,” VTAC chief executive Jiang Hong Hui said.
VTAC’s acquisition of 17Live involves fully purchasing the Taiwanese live-streaming platform’s issued and paid-up share capital. The financing of this acquisition is slated to be achieved by issuing 160.6 million new shares, each priced at $5, equating to a total consideration of $803 million, to 17Live’s existing shareholders.
An additional provision is made for an earnout arrangement, contingent on 17Live reaching the specified financial targets. If these targets are met, an allotment of 24.4 million new shares at $5 each will be extended to eligible shareholders, amounting to $122 million. This structure ensures that the deal aligns with performance-based milestones and potential future growth.
Joseph Phua, Chairman and co-founder of 17Live, expressed optimism about the company’s prospects following the listing, highlighting its strategic importance for expanding operations within Southeast Asia and globally.
As of the first half of fiscal 2023, 17Live has over half a million average monthly active users, with Japan and Taiwan serving as key markets. Demonstrating its financial strength, the platform generated revenue of $363.7 million in 2022 and has maintained profitability since 2020.