Southeast Asian ride-hailing and food delivery giant Grab Holdings is reportedly holding discussions regarding its plans to go public via a potential merger with a US-based special purpose acquisition company or SPAC. Grab Holdings may be valued at around $53 to $54 billion if these plans materialize, according to Asia One which cited sources familiar with the matter.
If this type of deal does go through, then it could potentially be the biggest-ever blank-check transaction.
The sources also noted on March 12, 2021, that Grab was holding discussions with Silicon Valley’s tech-focused investment company Altimeter Capital Management. Grab may have also held meetings with other SPACs, the sources claim.
Altimeter has supported two SPACs – including Altimeter Growth Corp and Altimeter Growth Corp 2.
The sources further noted that Singapore-headquartered Grab, which has grown its operations over the years from just a ride-hailing service in 2012 to become the most valuable startup in Southeast Asia (valued at $16 billion), had not yet confirmed any deal or transaction.
Reuters had initially reported in January 2021, citing sources familiar with the matter, that Grab was considering a US listing and that the firm’s IPO might secure $2 billion or more.
A more traditional listing, for which Grab’s management had recruited major Wall Street banks, might still be an option, the sources confirmed.
SPACs are basically exchange-listed shell companies that secure funding via IPOs and merge operations with firms by attracting them with significantly shorter listing schedules. The SPAC craze has really accelerated since last year. These so-called blank check companies acquired an all-time record $82 billion during 2020 and this trend has further accelerated this year.
Some other major SPAC transactions include UMW Holdings Corp’s $16-billion merger with a blank-check company that’s supported by billionaire Alec Gores. Then there was also the $24-billion deal that luxury electric car manufacturer Lucid Motors entered with a Michael Klein-backed SPAC.
Grab Holdings has the backing of major international investors such as the SoftBank Group Corp and Mitsubishi UFJ Financial Group.
The WSJ recently revealed that Grab was holding discussions with Altimeter, however, the news outlet did not mention which of Alitmeter’s SPACs Grab was might be working with. Grab may be raising anywhere between $3 billion to $4 billion from various private investors, which would be a part of the SPAC deal.
As reported last month, Grab will be creating 350 new jobs in Singapore during 2021 to support its business growth and development plans.
As covered in early February, Grab had decided to upsize its term loan facility to $2 billion due to growing interest from new investors.
Grab, which is one of Southeast Asia’s largest “Super App” providers, confirmed the successful closing of its first senior secured term loan facility, after commitments were made by global institutional investors.
The term loan facility should assist Grab with improving its liquidity and will also help diversify its funding sources. As noted in the announcement, the facility has been structured as a 5-year term loan B with a $2 billion principal. Grab’s management stated that this is the largest term loan B facility (to date) in Asia’s tech industry.