Novo Tellus Alpha Acquisition, Singapore’s third SPAC, meets strong IPO demand

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Novo Tellus Alpha Acquisition (NTAA), Singapore’s third special purpose acquisition company, or SPAC, which is set to make its trading debut at market open on Thursday, posted Wednesday its initial public offering (IPO) came in around 3.4 times subscribed, with strong demand from both institutional and retail investors.

To be sure, Singapore’s first two SPACs — Pegasus Asia and Vertex Technology Acquisition Corp. (VTAC) — both reported strong IPO demand, but then had tepid, fairly flat trading debuts. 

SPAC is essentially a “blank check” company, which raises funds in a public offering and seeks businesses or other assets to acquire later.

NTAA said Wednesday its Singapore public offer of 500,000 units was around 7.6 times subscribed, while the international offering of 9.5 million units was around 3.1 times subscribed. 

The 13 cornerstone investors subscribed for 16 million new units, the SPAC said in a filing to SGX. 

In total, the IPO raised S$150 million from the offering, the cornerstone units and the sponsor units, the filing said.

Each unit, priced at S$5.00 each, includes one Class A ordinary share and a half of one warrant, the filing said. Each whole warrant entitles the holder to subscribe for one Class A share at an exercise price of S$5.75 each, NTAA said.

In seeking a business to acquire, the SPAC said it plans to target the technology and industrials sector in the Indo-Pacific region, focusing on themes such as Industry 4.0, next generation semiconductors, cloud/edge computing, artificial intelligence (AI), medical life sciences, and supply chain resiliency for advanced engineering. 

The sponsor

The SPAC is sponsored by Novo Tellus PE Fund 2 LP, which has invested S$20 million of its funds into NTAA, or more than 10 percent of the total units, above the 3.5 percent minimum required equity participation under SGX’s SPAC framework, the statement said.

The sponsor also committed around S$7 million to subscribe for founder shares and 14 million private placement warrants at S$0.50 each, with a warrant exercise price of S$5.75 each, the filing said.

Credit Suisse (Singapore), the stabilising manager for the offering, has been given an overallotment option to subscribe for 2 million additional units, all of which have been allocated to the international offering, the filing said.

The joint issue managers, joint global coordinators, joint bookrunners and joint underwriters for the offering are Credit Suisse (Singapore) and DBS Bank, the filing said.

Sponsor Novo Tellus PE Fund 2 LP is the principal fund of the sponsor group, which includes New Earth Group 2, which is the general partner of the sponsor, Novo Tellus Capital Partners and the private equity funds advised by Novo Tellus Capital Partners, which are the sponsor and Novo Tellus PE Fund 1 LP, which reached the end of its fund life and is in the process of liquidation. 

Novo Tellus Capital Partners is a Southeast Asia-focused private equity firm which invests in the technology and industrials market.

Cornerstone Investors

The 13 cornerstone investors are taking up 16 million units in the SPAC, the filing said. 

Under the offering, cornerstone investor Affin Hwang Asset Management will take up 2.8 million units, or an 8.8 percent stake assuming the overallotment option is exercised in full, the prospectus said.

Venezio Investments, an indirect wholly owned subsidiary of Singapore state-owned investment company Temasek Holdings, took up 1.5 million units as a cornerstone investor, or a 4.7 percent stake assuming the overallotment option is exercised in full, the prospectus said.

Another 5.85 million units, or a 19.5 percent stake assuming the overallotment option is exercised in full, will be taken up by the other cornerstone investors, the prospectus said.

The other cornerstone investors are: 

  • Singapore-based Asdew Acquisitions, which is mainly owned by Wang Yu Huei; it mostly invests in listed equities, fixed income products and real estate products. 
  • DBS Bank on behalf of certain wealth management clients.
  • DBS Bank (Hong Kong) on behalf of certain wealth management clients. 
  • Fortress Capital Asset Management (M), a Malaysia-based asset management and private investment group; it manages investment portfolios for institutional investors and the high net worth segment. 
  • Gerald Oh, who is a director of Intuitive Capital, an investment research firm. 
  • Heritas Capital Management is a Singapore-based private equity and venture capital investment firm focusing on healthcare, education and technology. 
  • KSC (S) is a Singapore-based investment management company, providing portfolio management and advisory services to high net worth clientele, corporates and institutional investors; it focuses on equity investments in the Asia-Pacific region. 
  • Maxi-Harvest Group, a Singapore-based investment holding company specializing in equities and fixed-income investments in Southeast Asia. It is wholly owned by Lee Sai Sing, who has worked in the fund management industry with major financial institutions including GIC. 
  • Ronald Ooi, who is the former chairman and CEO of Kim Eng Holdings and the current chairman of Yuanta Securities Asia Financial Services. 
  • Target Asset Management, a Singapore-based boutique fund management firm founded by Teng Ngiek Lian; it focuses on listed equities in Asian markets. 
  • UBS Asset Management (Singapore), in its capacity as investment advisor for NINETEEN77 GLOBAL MULTI-STRATEGY ALPHA MASTER