Packable strikes $1.55bn SPAC deal

BY Richard Summerfield

Ecommerce marketplace enablement platform Packable has entered into a definitive agreement to merge with Highland Transcend Partners Corp, a special purpose acquisition company (SPAC), in a deal worth $1.55bn.

Packable, which is backed by private equity firm The Carlyle Group, was valued at around $1.1bn in November 2020 when Carlyle invested $250m to acquire its stake in the company.

Under the terms of the deal, Packable’s existing shareholders will receive 71 percent of the combined company, Highland Transcend SPAC founders and investors will own 19 percent, while private investment in public equity (PIPE) investors, including Fidelity Management & Research Company, Lugard Road Capital, Luxor Capital, Park West Asset Management and Morningside, will receive the remaining 11 percent.

“This is an incredibly exciting time for our team, and we are thrilled to partner with Highland Transcend as we plan to enter our next chapter as a public company,” said Packable co-founder and chief executive Andrew Vagenas. “While we’ve become a market leader in our industry, there is significant runway ahead of us in multiple avenues: from the continued proliferation of online marketplaces and geographic opportunities to our ability to invest in and grow Digitally Native Brands, while providing new data and technology services, as well as marketing options for our brand partners.”

“While we believe that third-party marketplaces will contribute more than 40 percent of all ecommerce revenues by 2025, brands find themselves challenged to manage the complexity of executing across these platforms,” said Ian Friedman, chief executive of Highland Transcend. “Packable has a leading software-driven offering enabling brands to grow their businesses across multiple online marketplaces. Andrew and the entire team have built an incredibly strong competitive platform; with approximately 75 million customer transactions to-date, we believe that Packable has one of the largest sets of third-party marketplace transaction data, outside of the marketplaces themselves. This data enables Packable’s competitive pricing, merchandising, and marketing decisions and will allow the company to launch a Software-as-a-Service offerings in the future.”

News: Carlyle-backed Packable agrees $1.55 billion SPAC merger

PayPal to acquire Paidly for $2.7bn

BY Richard Summerfield

Payment behemoth PayPal Holdings Inc has agreed to acquire Japanese ‘buy now, pay later’ firm Paidy in a deal worth $2.7bn.

Completion of the transaction, following regulatory approval, is expected in the fourth quarter of 2021. Under the terms of the agreement, Paidly will continue to operate its existing business and maintain the brand while the company’s leaders, Riku Sugie, president and chief executive, and Russel Cummer, founder and executive chairman, will keep their respective positions.

The ‘buy now, pay later’ market has grown significantly of late – likely as a result of the coronavirus (COVID-19) pandemic – with companies including Paidly, Klarna and Afterpay all increasing in prominence. The industry has also begun to see some consolidation, with Square Inc announcing in August that it was to acquire Afterpay Ltd for $29bn.

Paidly has more than 6 million registered users. It plans to integrate PayPal and other digital and QR wallets with Paidy Link – a service it launched in April 2021 which allows customers to link digital wallets to their Paidly account – to connect further online and offline merchants.

While Paidly has a considerably smaller customer base, Japanese consumers are beginning to move away from cash payments, which at present account for 70 percent of payments in the country. As such, there is considerable room for growth in the ‘buy now, pay later’ segment of the Japanese e-commerce space. The acquisition will see PayPal increase it’s foothold in Japan - the world’s third-largest e-commerce market - where it currently has around 4.3 million active users.

“Combining Paidy’s brand, capabilities, and talented team with PayPal’s expertise, resources, and global scale will create a strong foundation to accelerate our momentum in this strategically important market,” said Peter Kenevan, vice president and head of Japan at PayPal.

“There is no better home for Paidy to continue to grow and innovate than PayPal, which has been removing friction from online shopping for more than 20 years,” said Mr Cummer.

PayPal is already active in the buy now, pay later space. In August 2020, the company introduced a new instalment credit option for PayPal users called ‘Pay in 4’.

News: PayPal's $2.7 bln Japan deal heats up buy now, pay later race 

Prosus increases Indian investments

BY Richard Summerfield

Prosus N.V. has agreed to acquire BillDesk in a deal worth $4.7bn, subject to approval from the Competition Commission of India.

The deal will increase Prosus’ total investment in Indian start-ups to more than $10bn, the company said in a statement. Prosus’ Indian portfolio includes food delivery company Swiggy, EdTech giant BYJU’S, FinTech company LazyPay, and Urban Company.

Upon completion, the deal is expected to create a financial ecosystem that could handle 4 billion transactions annually, which is nearly four times what PayU, another Prosus FinTech, does in India currently, as well as meet the changing payments needs for multiple stakeholders in the country.

“We have a long and deep relationship with India, having supported and partnered with some of its most dynamic entrepreneurs and new tech businesses since 2005,” said Bob van Dijk, group chief executive of Prosus. “We’ve invested close to US$6 billion in Indian tech to date, and this deal will see that increase to more than US$10 billion. BillDesk exemplifies the ambition and expertise of Indian entrepreneurs, who are among the best in the world, with exceptional abilities to build products and services and understand scale and value. This is critical in a country as vast as India.”

“We believe this transaction will stimulate both innovation and competition within India’s digital payments industry,” said Laurent Le Moal, chief executive of PayU. “This will not only help to strengthen India’s digital economy, but also bring financial services to those who may have historically been excluded. This ambition is fully aligned with the Government of India’s vision of ‘Digital India’ and is a key objective for PayU across all the communities we serve globally. This deal is an example of how our purpose and our business objectives work together, accelerating growth and increasing access to financial services.”

“BillDesk has been a pioneer in driving digital payments in India for well over a decade,” said M N Srinivasu, co-founder of BillDesk. “This investment by Prosus validates the significant opportunity in India for digital payments that is being propelled by innovation and the progressive regulatory framework put into place by the Reserve Bank of India, India’s central bank. BillDesk has always been committed to making payments faster, easier and more secure. We are excited about what the two great teams at BillDesk and PayU can deliver together as a driving force within the evolving digital payments landscape in India.”

BillDesk was founded in 2000 and counts Visa, General Atlantic and Temasek Holdings, among others, as its investors.

News: Prosus doubles down on India with $4.7 bln deal for BillDesk

Goldman Sachs to acquire NNIP

BY Richard Summerfield

The Goldman Sachs group has agreed to acquire NN Investment Partners from NN Group N.V. for around $1.98bn. The transaction is expected to close by the end of the first quarter of 2022, subject to regulatory and other approvals and conditions.

The deal will essentially double Goldman Sach’s European assets under supervision to about $600bn and will bring “great cross-selling opportunities” for Goldman Sachs Asset Management, according to Julian Salisbury, head of Goldman Sachs Asset Management.

“This acquisition allows us to accelerate our growth strategy and broaden our asset management platform,” said Mr Salisbury. “NN Investment Partners offers a leading European client franchise and an extension of our strength in insurance asset management. Across NN Investment Partners’ offerings they have been successful in integrating sustainability which mirrors our own level of ambition to put responsible investing and stewardship at the heart of our business.”

The deal also enhances Goldman Sachs’ global position as it boosts the firm’s fund management and distribution with $355bn in assets under management and about $70bn in assets under advisement. The acquisition of NNIP is the biggest deal by Goldman Sachs since David M. Solomon became chief executive in 2018.

Under the terms of the deal, NNIP’s 900 employees will join Goldman Sachs and the Netherlands will become “a significant location” in the firm’s European operations. Furthermore, the two companies will enter a 10-year strategic partnership under which Goldman will provide asset management services to NN Group on an investment portfolio of $190bn, the companies said in a statement.

“NN Group and NN Investment Partners have a longstanding and successful shared history,” said David Knibbe, chief executive of NN Group. “We value this strong and constructive relationship that we have and we look forward to further building on it in a new form. This transaction brings together two international asset managers, each with many decades of investment experience. We have found a strong and professional partner in Goldman Sachs, providing an environment in which our NN Investment Partners colleagues can continue to thrive, while the combined investment expertise and scale will enhance the service offering to NN Investment Partners’ clients, including NN Group.

“This transaction will also give NN Group greater optionality to develop a broader range of asset management propositions for our customers.,” he continued. “Our approach and ambitions around ESG will remain unchanged and Goldman Sachs shares our commitment to responsible investing.”

News: Goldman Sachs to buy Dutch asset manager NNIP for around $2 billion

Out of this world: Virgin Orbit goes public in $3.2bn SPAC deal

BY Fraser Tennant

In a $3.2bn deal that will make it a publicly-traded company, satellite-launch services provider Virgin Orbit is to merge with special purpose acquisition company (SPAC) NextGen Acquisition Corp. II.

Under the terms of the definitive agreement, the transaction is expected to provide the combined company up to $483m in cash proceeds, including up to $383m of cash held in the trust account of NextGen and a $100m fully committed private investment in public equity (PIPE). Additionally, the combined company will retain the Virgin Orbit name and is expected to be listed on Nasdaq under the ticker symbol ‘VORB’. 

Operating one of the most flexible and responsive satellite launchers ever invented, in just a span of four years Virgin Orbit has developed a proprietary air-launch technology, coupled with world-class manufacturing infrastructure and a proven team to transform space access for a diverse and global customer base.

“We have built Virgin Orbit in order to change the business of satellite launch and to open space for everyone, globally,” said Dan Hart, chief executive of Virgin Orbit. “Our success in launch has driven the business forward, and we are driving innovation with world-class design and advanced manufacturing capabilities, our unrivalled mobility of launch, and our exciting space solutions services.”

The boards of directors of both Virgin Orbit and NextGen have unanimously approved the proposed merger.

“We are delighted that our search for a great company, with strong organic growth in a large and growing market, disruptive technology and a world class management team has led to our partnership with Virgin Orbit,” said George Mattson and Greg Summe, co-founders of NextGen. “The space economy is developing rapidly, and Virgin Orbit is well positioned to benefit through its ability to competitively launch at any time, from any place on Earth, to any orbit and inclination.”

The merger is expected to be completed in Q4 2021 subject to, among other things, the approval by NextGen’s shareholders and the satisfaction or waiver of other customary closing conditions.

Sir Richard Branson, founder of Virgin Orbit, concluded: “I am very excited we are taking Virgin Orbit public, with the support of NextGen. It is another milestone for empowering all of those working today to build space technology that will positively change the world.”

News: Branson's Virgin Orbit to go public through $3.2 bln SPAC merger