By
Bhushan Akolkar
April 12th, 2024
SoftBank’s blank-check firm SPAC has been attracting some market players and investors by helping companies to go public. The SPACs are backed by SoftBank Investment Advisers that oversees the company’s Vision Fund.
Last Friday, February 5, Japanese multinational conglomerate SoftBank filed for two more SPACs- special purpose acquisition companies – as it plans to raise $550 million through their Initial Public Offerings (IPOs). These two SoftBank SPACs will be the SVF Investment Corp 2 and the SVF Investment Corp 3.
In the regulatory filing, the SVF Investment Corp 2 stated that it plans to sell nearly 20 million units, comprising of both shares and warrants at $10 apiece. On the other hand, the SVF Investment Corp 3 said that it will sell nearly 35 million shares at the same price. The SVF Investment Corp is part of SoftBank’s Vision Fund and has reportedly raised over $600 million earlier this year.
Last Friday, each unit of the SVF Investment Corp (SVFAU) was trading at $13.40, a 34% premium since its inception. SVF has yet to announce a merger partner. In a separate private placement concurrent with the current offering, SoftBank has committed to buying $300 million worth of stocks and warrants. In a note to investors accessed by Barrons, the SEC regulatory filing by SoftBank states:
“SPACs 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.”
It further adds:
“We believe our SPAC [they make the statement in all three cases] 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.”
SoftBank SPACs Attract Big Market Players
SoftBank’s blank-check firm SPAC has been successful in riding the mania attracting new players wanting to go public. Office-sharing startup WeWork is planning a merger with SoftBank’s SPAC. This will give WeWork an early footing to plan for its Initial Public Offering (IPO).
Because of its unique structure of helping companies to go public, SPAC has attracted many such investors over the last year. In January 2021, SPACs raised around a whopping $24.26 billion. This was 20 times more than what it raised during the same period in 2020. Citing data from Refinitiv, Reuters states that this was 30% of the total funds raised in the entire 2020.
The two SPACs launched by SoftBank last Friday will list on Nasdaq. More importantly, they are backed by SoftBank Investment Advisers which also oversees the company’s $100 billion SoftBank Vision Fund. This is, so far, the world’s largest vision fund launched to date.
The latest SPAC offerings have big underwriters like UBS, Deutsche Bank, and Citigroup. It will be interesting to see the developments ahead.