Tiga Acquisition (TINV) offers an asymmetric opportunity to acquire a high-profile Asian unicorn, at near NAV, with a DA on the horizon as early as next month based on a short deadline.
Tiga Acquisition is a SPAC led by Raymond Zage, an American investor and former hedge fund manager based in Singapore. Raymond is a well known figure in the Asian VC world, and served as the head of Asian practice at Farallon Capital for years before founding Tiga. In addition, Tiga’s lineup of directors comprise senior ex-dealmakers from the Asian practices of Goldman Sachs, Morgan Stanley and Nomura, including David Ryan. In short, the Tiga team is a who’s who of the Asian M&A community.
Notably, Raymond is an investor and a board member at Gojek which, together with Grab, form the Southeast Asian equivalents of Uber or Lyft. Raymond is also the owner of the dating app Grindr, having taken over the company from the Chinese owners who were court-ordered to divest their U.S. investment, and subsequently sold to Raymond in March 2020.
Why is all of this background information, below are a couple of important clues for TINV:
TINV’s S-1 filing states that Raymond is looking to leverage “special situations where due to transitional circumstances and long standing relationships, an opportunity exists to invest in a business at a significantly attractive valuation as compared to the inherent fundamental value of the business”. In particular, it cites the COVID-19 pandemic and the U.S. – China trade war as two notable sources of such transitional circumstances.
- This statement applies to Grindr, which fell on Raymond’s hands last year due to the U.S.-China trade tensions. In addition, Grindr was looking to IPO in 2019-2020 prior to ownership change, and could be looking to rekindle the listing plan with the new owners, a more friendly White House administration, and the tailwinds in the dating app market with the highly anticipated Bumble IPO. If so, TINV is the perfect vehicle for Grindr’s public listing, given that Raymond is the primary dealmaker behind both companies.
- This statement also applies to Gojek, which has not only been hit hard by the COVID-19 pandemic earlier, but also have been in active discussions with Tokopedia for a merger and public listing (in Indonesia and later Nasdaq), after their earlier merger talks with Grab in December fell through.
- Finally, Traveloka could also emerge as an interesting target, for which the statement also applies, as it was adversely affected by COVID. Traveloka’s in-house deal team, headed by Hendrik Susanto (a former Goldman Sachs employee and a colleague of Tiga directors in NY and Singapore), has been working actively on potential IPO options since 2019. Traveloka publicly confirmed that it was in discussions with SPACs as early as December 2020, at which point there were only a few active SPACs focusing on Asian tech companies: Bridgetown I (which was in negotiation with Tokopedia), CITIC (China-focused) and Tiga. Given these connections, it’s hard to imagine Tiga is not involved in a potential listing negotiations with Traveloka.
In addition, as many SPACs do, Tiga’s S-1 explicitly states that they may complete a business combination in which one of its directors may have a conflict of interest / ownership (with certain guidelines as to not breach fiduciary duties). This clause allows TINV to take the above companies public via a SPAC deal.
In Tiga’s S-1 filing, the SPAC explicitly names a 6-month deadline to complete the acquisition, expiring in May 2021. If the SPAC fails to complete the deal, the sponsors must deposit $2,000,000 into the trust (~$0.10 per common stock) for every 6-month extension thereafter.
Very few SPACs have this structure – in fact, CFAC and ZNTE are the only other two that I am aware of, and both already have deal rumors from Bloomberg and Axios, respectively. This clause shows that the management team is extremely confident in landing a deal in the coming months. Given Raymond’s background and heavy IPO oversubscription, this was likely not just a sweetener thrown to attract potential investors.
Since the DA to merger timeline typically takes 10 to 14 weeks to consummate, Tiga could be announcing a deal as early as next month, if it wanted to comply with the timeline. That would be a sweet turnaround time for those who invest today.
While management’s focus areas and backgrounds differ across these SPACs (I’m not trying to compare Masa to Raymond here), it does appear evident that TINV offers the earliest deal deadline and lowest risk profile among them, for those seeking exposure to Asian unicorn deals. Given that the most important factors in SPAC deal making are pre-existing connections, knowledge of the market, and willingness to offer attractive terms, TINV should have a good chance at the negotiation table. Perhaps this is why TINV warrants trade at a relatively high price vs. commons (~$2.1).