Grab Holdings Inc. is in talks to go public through a merger with a SPAC that could value the Southeast Asian startup at up to $ 40 billion, making it by far the largest business on record.
The Singapore company is discussing an agreement with a special purpose acquisition company affiliated with Altimeter Capital Management LP that values it between $ 35 billion and $ 40 billion, according to people familiar with the matter. (Altimeter has two SPACS; it was not possible to find out which one is in conversation with the Grab.)
As part of the deal, Grab would raise between $ 3 billion and $ 4 billion in a so-called PIPE, a financing round that normally accompanies a SPAC merger, people said. That amount may still change, as Grab and Altimeter will begin to meet with mutual funds and other potential investors soon, some people said.
The parties may announce the deal in the coming weeks, although negotiations may still fall apart and Grab may revert to an earlier plan to stage a traditional IPO on a U.S. exchange this year.
If they move forward with a SPAC deal, it would be the highlight of a recent explosion of such transactions, in which an empty shell raises money in an initial public offering with plans to later find one or more companies to merge. In some cases, SPAC ends up with only a small portion of the new public target.
So far this year, a record $ 70 billion has been raised for SPACs, which account for more than 70% of all public stock sales, according to Dealogic. Several companies are negotiating a merger with SPAC or have already agreed to one, including office sharing company WeWork, online photo album maker Shutterfly Inc. and online lending company Social Finance Inc.
In addition to hitchhiking, Grab, founded in 2011, delivers food and other items and provides digital financial services to merchants.
Its sponsors include SoftBank Group Corp.
, Uber Technologies Inc.
and Toyota Motor Corp.
It was last publicly valued at about $ 15 billion in a fundraising round in October 2019, according to PitchBook.
Altimeter SPACs – Altimeter Growth Corp.
and Altimeter Growth Corp. – raised $ 450 million and $ 400 million in October and January IPOs, respectively. Altimeter Capital, of Menlo Park, Calif., Has about $ 16 billion under management and invests primarily in technology companies.
The company has accumulated a series of successful investments and was a key player in a Roblox financing round in January. Corp.
raised before its IPO at $ 45 per share. In its debut on Wednesday, the shares of the video game platform traded more than 50% above that level and continued to rise on Thursday morning.
Japan’s SoftBank, which invested through its Vision Fund, is also on the verge of earning a lot in Grab.
Private companies are switching to special-purpose acquisition companies, or SPACs, to bypass the traditional IPO process and obtain a public listing. The WSJ explains why some critics say that investing in these companies called blank checks is not worth the risk. Illustration: Zoë Soriano / WSJ
Write to Maureen Farrell at [email protected]
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