Malacca MLACU
The transaction has no minimum cash closing condition.
No pipe?
MNC Group will roll 100% of its equity in AVN, and will receive additional AVN ordinary shares in connection with the merger so that when combined with its existing shares, it will own a number of shares reflecting a pre-money enterprise value of AVN of $530 million, subject to certain purchase price adjustments and indemnification obligations, with each AVN ordinary share valued at the price per share paid to each Malacca Straits public shareholder who redeems their MLAC shares in connection with the business combination.
18 Months. Closed July 21, 2020
1 W +$11.50 - $9.20 pipe adjust.
Trust $143,750,000 including overalot.
Shares 14,375,000'
While we may pursue a business combination target in any business or industry and across any geography, we intend to focus our search on businesses which are currently part of Southeast Asian business conglomerates in the media, food processing, renewable energy and healthcare industries, which we believe can be positioned for success in Southeast Asian markets, as well as other Asian markets and beyond.
We believe that, with a population of 649 million and a nominal GDP of approximately $3 trillion in 2018, as reported in the ASEAN Statistical Yearbook 2019 compiled by the ASEAN Secretariat, ASEAN, made up of Brunei Darussalam, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam, is fast becoming a major economic force in Asia and a driver of global growth. We intend to focus on companies that have the potential for success in this region as we believe that such companies will benefit from a young and growing population, robust economic growth and expansionary volume of trade in goods. According to the ASEAN Statistical Yearbook 2019, ASEAN remains one of the fastest growing regions in the world with economic growth continuing to average 5.4%, and is predicted to become the fourth-largest economy in the world by 2030 after the United States, China, and the European Union.
We believe that we are uniquely positioned to tap into what we believe is a de-conglomeration phase that business groups in Southeast Asia are currently undergoing, by leveraging our sponsor’s, affiliates’ and management team’s long investment track record and deep network of relationships in Southeast Asia.
Argyle Street Management Limited (“ASM”), an SEC-registered investment adviser and indirect member of our sponsor, was founded in Hong Kong, China in 2002 as a pan-Asia special situations investor. ASM manages approximately $1.4 billion and has over 50 employees in offices in Hong Kong, Thailand, Indonesia, the Philippines, Singapore and the United States. ASM has long-standing strategic relationships in Southeast Asia, including with family-owned business conglomerates, sovereign wealth funds and other Asian corporate groups. Such business relationships form the backbone of ASM’s long investment track record and deal-sourcing capability. ASM won the Eurekahedge Best Asia ex-Japan Hedge Fund Award in 2011, AsiaHedge Fund of the Year in 2010 and Eurekahedge Best Asian Distressed Debt Fund Award in 2007. We believe ASM’s extensive investment experience, broad and deep relationships with Asian business groups, strong reputation, and support of its stakeholders helps to give us a deep understanding of applicable regulations and policies, demographics and the political landscape in our target sectors and regions.
We also expect to be close investment partners with TIH Limited (“TIH”), a Singapore-listed closed-end fund formed in 1994, with strong historical ties to Singapore government-linked companies and focused on investment opportunities in Southeast Asia. Throughout its operating history and investment experience, TIH has invested in a broad variety of sectors including Consumer & Industrial Products, Healthcare, Technology, Media & Telecommunications, Food, Manufacturing and Chemicals, with a strong focus in Asia. TIH has extensive experience in cross-border private equity investments and divestments including but not limited to restructuring, mergers & acquisitions and joint venture opportunities. TIH’s largest shareholder is Lippo Group, one of Asia’s largest and most diversified conglomerates, who are also among the largest property developers and the largest healthcare groups in Indonesia. TIH Investment Management is an investment adviser to two ASM funds, and the TIH and ASM investment teams have worked closely on deals together. We intend to draw upon ASM and TIH’s respective platforms, infrastructure, personnel, network and relationships to provide access to deal prospects, along with any necessary resources to aid in the identification, diligence, and operational support of a target for the initial business combination. We believe that we will benefit from ASM and TIH’s investment experience across the sectors on which we intend to focus. Both maintain extensive networks of relationships, and we currently anticipate that ASM and TIH may, from time to time, assist us in the identification of assets or companies that may be appropriate
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acquisition targets and in unlocking their long-term value. Neither ASM nor TIH are obligated to identify any such target assets or companies or to perform due diligence on any acquisition targets. Any such activities are the responsibility of our management team.
Kin Chan, our advisor, is the founder and Chief Investment Officer of ASM as well as the Chairman of TIH. He is also the Non-Independent, Non-Executive Director of OUE Limited, listed on the Singapore Exchange, and CITIC Resources Holdings Limited, a Hong-Kong listed natural resources company. Mr. Chan was Chief Executive and Managing Director of Lazard Asia Limited in the early 2000’s and managed the firm’s advisory business outside of Japan. Prior to joining Lazard, Mr. Chan was an Executive Director at Goldman, Sachs & Co, where he worked in Hong Kong, New York, and Singapore.
We will seek to capitalize on the strength of our management team and advisor. Our management team and advisor consist of professionals and senior operating executives of various companies with decades of experience and industry exposure in media, food processing, energy and healthcare. Based on our management team and advisor’s extensive experience and industry exposure, we believe we will be able to identify, evaluate the risk and reward of and execute on attractive acquisition opportunities. Our management team and advisor are supported by ASM and TIH’s teams of investment professionals who each have meaningful investing experience and possess extensive experience in corporate finance, mergers and acquisitions, equity and debt capital markets, strategic consulting, and operations.
Kenneth Ng, our Chief Executive Officer, President and a director has over 20 years of experience in hedge funds, private equity, equity derivatives, and buy-side investment banking. He is the founder and current Managing Partner of Ark Pacific Capital Management Limited, (“Ark Pacific”) an asset management company licensed with the Securities and Futures Commission in Hong Kong, with overall leadership responsibility in managing investments in growth, special situations private equity and real estate investments across Asia. Since 2018 he has also served as the executive director of Sprint Power Technology Limited, a consulting and engineering services company with a focus on low-carbon automotive technology, where he is responsible for financial management, investor relations and global strategic partnerships. Previously, Mr. Ng served as an executive director and a founding team member at Elliott Advisors (HK) Limited, the Asian arm of the global multi-strategy hedge fund Elliott Associates, where he oversaw investments in public equities, public debt, private credit and private equity in Asia. Prior to that, Mr. Ng worked as an associate director in the equity derivatives department at UBS AG and an associate at TPG Capital Asia, a private equity firm. Mr. Ng started his career in New York with Merrill Lynch & Co., where he worked on corporate finance transactions and mergers and acquisitions in the technology sector.
Stanley Wang, our Chief Financial Officer and a director, is the founder and managing director for K2 Venture Capital Company Limited, a venture capital investment company focused on investments in financial technologies and artificial intelligence opportunities in Southeast Asia. Mr. Wang is also a consultant and management investment committee member of TIH, where he provides consultation and approves investments. Prior to that, Mr. Wang held senior management positions in a few conglomerates, serving as a managing director at Emerging Asia Capital Partners, a Thailand-based project financing advisory firm, senior financial advisor to Ital-Thai Development PCL, a civil infrastructure and construction group, and managing director at PK Development Pty Ltd., a property development company in South Africa. Previously, Mr. Wang was an executive director at Goldman Sachs (Asia) Limited, Hong Kong and Singapore, a senior associate at Morgan Stanley (Asia) Limited, Hong Kong, and an associate at Morgan Stanley Real Estate International, New York , where he was involved in both real estate investment banking and project finance.
Christian Jason Chan, one of our directors, is a private investor managing a family investment fund since 2003, and a professional advisor to family offices and value-oriented investment funds. Mr. Chan has also served as an independent director and chair of the audit committee of LookSmart, Ltd. (Nasdaq: LOOK), a digital advertising solutions company. Prior to this, Mr. Chan was a trader and research analyst at LIM Advisors, an investment advisory group in Asia, as well as the vice president of business development at Pioneer Global Group Limited (HK: 224), a Hong Kong real estate development company and investor. Mr. Chan started his career as an analyst, later an associate, at Goldman Sachs, specialising in distressed assets.
Ping He, one of our directors since inception, brings over a decade of professional experience in international finance and venture capital. Mr. He is currently the head of finance for Osix Corporation, a growth capital financing company based in Silicon Valley. Concurrently, he is an active startup investor and advisor in several international
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companies spanning e-commerce, gaming, fintech, consumers and logistics, as well as a director of Labforinvention Corp., a novel materials research and development company, and Alkymia SAS, an internet technology company. Previously, Mr. He was a director at Quintus Partners LLC, a cross-border merchant bank responsible for sourcing, due diligence and execution of M&A and growth capital mandates. Prior to that, Mr. He worked as a manager at Refinitiv, a global provider of financial market data and infrastructure, responsible for identifying and developing technology-enabled business opportunities, as an investment associate at ASM, as an investment banking analyst at Barclays and as an analyst at NERA Economic Consulting. Mr. He is also a CFA charterholder.
Dwi Prasetyo Suseno, one of our directors, is currently an executive director and deputy group chief executive officer of Golden Energy and Resources Ltd (SGX: AUE), a leading energy and resources company in the Asia-Pacific region. He has over 25 years of experience in mining, commodities and oil and gas related industries with exposure to operations, general management, trading, finance, business development, mergers and acquisitions, corporate legal matters and international taxation. Mr. Suseno has over the course of his career worked as a board commissioner at PT Indo Straits Tbk (IDX: PTIS), a marine and mining company listed on Indonesia Stock Exchange, the group chief financial officer and executive director at Straits Asia Resources Limited (SI: STRL), a regional mining company, a non-executive director at Twin Ocean Property, a property development company in Australia, a regional tax manager at Baker Hughes Inc. (NYSE: BKR), a Fortune 500 oil services company, and a corporate tax manager at Arthur Andersen and Ernst & Young LLP Australia. Mr. Suseno is a Fellow Certified Public Accountant of CPA Australia. He is also a Chartered Accountant and member of the Institute of Singapore Chartered Accountants.
Our management team and advisor, supported by ASM and TIH teams of investment professional, have worked closely together on numerous opportunities and investments over the past several years, including but not limited to the following:
TIH Limited: A Singapore-listed closed-end private equity fund with assets in Greater China and Southeast Asia. In 2003, ASM started accumulating a stake in TIH. After buying out minority shareholders, ASM further increased its stake by launching tender offers and underwriting rights issues. To incentivize TIH’s management to unlock value, ASM re-aligned its interest by resetting TIH’s performance fee hurdle. In the end, TIH liquidated its entire portfolio, achieving a significant return on its investment from 2005 to 2018. Through our investment in TIH, ASM built strong relationships with the flagship Sovereign Wealth Fund of Singapore. ASM bought more than 8 assets in 4 transactions from the Sovereign Wealth Fund, including minority stakes in Mitsui Life and Citic Resources.
Comstar Automotive Technologies Pvt. Ltd: One of the leading multinational automotive ancillary companies engaged in the design and manufacture of starting and charging systems for global passenger car and light commercial applications with its main manufacturing base in India and an assembly line in China. ASM, together with the Chandaria family, acquired Comstar (formerly Visteon Powertrain) from Visteon Corporation before the financial crisis in 2008 when Visteon was facing liquidity problems. The Chandaria family own Comcraft Group, an Indian conglomerate with annual revenue of approximately $2 billion. ASM and its co-investor improved Comstar’s performance to the point that they recovered all of their respective investment costs from dividends driven by strong operating cash flow throughout the investment period. Comstar was successfully sold to Blackstone for $140 million in early 2018, earning a substantial overall return for the co-investors.
Salim Group: One of Indonesia’s biggest conglomerates, which owns a top ramen noodle manufacturer in Indonesia and the largest convenience store chain in Indonesia with more than 17,000 outlets in 2019. In 2015, ASM participated in a $1 billion investment for the Salim Group’s consumer service business. In 2016, ASM and the owner of the group jointly put in $220 million to acquire and invest in a coal mine in Australia with 474 million tonnes of marketable reserves. In May 2020, First Pacific, the Hong Kong-listed platform of Salim Group, announced a $3 billion acquisition of Pinehill Group, a Middle East/ Africa focused instant noodle business. ASM’s managed fund was one of the sellers.
We believe that the experience of our management team and advisor and their long-standing relationship with the advisory teams from ASM and TIH puts us in a good position to source, identify and execute an attractive transaction for our shareholders