SoftBank Group, Japan’s second largest publicly traded company, filed in the United States to secure up to $604 million for a special purpose acquisition company (SPAC), a shell company established to merge with an operating company to enable the latter to become publicly listed without undergoing the lengthy traditional IPO process.
The upcoming SPAC is called SVF Investment Corp. and will be sponsored by SVF Sponsor LLC, which is a wholly-owned subsidiary of SB Investment Advisers (US) Inc., (SBIA). It will be led by Rajeev Misra, the CEO of Vision Fund, the world’s largest venture capital fund that specializes in technology.
The company intends to be promptly listed on the Nasdaq exchange under the symbol SVFAU. Also, the company expects to start separate trading for its Class A ordinary shares (SVFA) and warrants (SVFAW) 52 days after the date of the filed prospectus.
The regulatory filing entails an offering of 52.5 million units for $10 each. It also comes with an over-allotment option of 7.9 million units. Hence, the maximum amount that can be raised can go as high as $604 million.
SVF Sponsor LLC has already agreed to purchase 8,333,333 warrants or 9,383,333 warrants if the over-allotment option is fully exercised. Each warrant can be used to buy one Class A ordinary share at $11.50 each. This price is subject to adjustment at $1.50 for every warrant in a private placement.
SVF Investment Corp’s initial investor, the sponsor, owns 15,093,750 Class B ordinary shares. Close to 2 million of which may be forfeited based on the extent of the exercise of the underwriters’ over-allotment option.
SoftBank has not released details regarding the operating company it intends to help go public with this SPAC. However, what is certain is that it will be used to acquire a tech company.
This new attempt by SoftBank to ride on the SPAC bandwagon has stirred some noise, especially as there appears to be a slight controversy in the use of special purpose acquisition companies to facilitate investments and raise capital.
In its SEC filing message, SoftBank emphasized the advent of the AI revolution and that the group has been investing in technology to capitalize on the rise of artificial intelligence and its impact on everyday life. “Our SPAC will bridge SoftBank’s private and public investing strategies by enabling us to partner with a fast-growing, IPO-ready technology company. We believe that we have access to a wide range of compelling investment opportunities through our broad international presence and deep local networks,” the filing’s team message reads.
Moreover, SoftBank stresses the advantage of being able to work with emerging tech leaders to develop new solutions that benefit consumers and investors alike. “We believe our SPAC provides public investors with a distinct opportunity to benefit from the growth of a leading technology company that will generate long-term shareholder value. We are backing our belief by committing a significant amount of capital to it,” the filing message adds.
Softbank is one of the world’s biggest investors in tech companies. Some of the company’s well-known investments are Uber, ByteDance, Slack, and WeWork. SoftBank also holds significant stakes in T-Mobile US, Brightstar, Alibaba, Yahoo Japan, Renren, Snapdeal, Paytm, Compass, Cruise Automation, and Tokopedia.
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