ADQ and Chimera Investments to set up UAE's first Spac

Abu Dhabi-based holding company ADQ and private investment firm Chimera Investments have set up the UAE’s first special purpose acquisition company (Spac) with the aim of investing in tech-focused businesses.

The newly formed blank-cheque company, ADC Acquisition Corporation PJSC, plans to raise Dh367 million ($100m) through an initial public offering of 36.7 million shares at an offer price of Dh10 per share, the companies said in a joint statement on Tuesday.

Shares will be sold to retail and professional investors in a public subscription in the UAE and listed on the Abu Dhabi Securities Exchange (ADX).

The Spac will "target companies in the Mena region that are fast-growing, technology-driven businesses with strong management teams and attractive valuations," Mohamed Hassan Alsuwaidi, managing director and chief executive of ADQ and chairman of ADC, said.

"Through ADC, we are creating a desirable investment structure in the UAE that is well positioned to identify and consolidate target companies through a differentiated approach, providing private companies a new route to funding from public markets and investors.”

A Spac is a vehicle with no commercial operations that is formed with the intention of raising funds through an initial public offering (IPO) and then acquiring an existing company. Spacs have lighter disclosure requirements than IPOs and have been increasingly used over the past 18 months to take fast-growing companies public quickly.

Spacs are increasingly becoming popular in the Middle East. Abu Dhabi Global Market-headquartered Anghami, the music streaming rival of Spotify in the Arab world, successfully listed on the Nasdaq in February by merging with a blank-cheque company.

In January, the UAE's Securities and Commodities Authority approved the region’s first special purpose acquisition company (Spac) regulatory framework. It is part of the UAE's plans to develop its capital markets and bring its products and services in line with those of global peers.

“With the launch and listing of ADC, Chimera aims to capitalise on ADX’s newly issued SPAC regulations, offering investors faster access to capital, higher transparency and lower fees," Syed Basar Shueb, chairman of Chimera Investments and vice chairman of ADC, said. "This in turn will increase liquidity and access to financing for Mena-based businesses."

The listing is subject to market conditions and customary approvals, the companies said, without providing a timing for the deal.

The planned ADC listing follows a strong performance for the ADX in the first quarter of 2022, which is up 20 per cent since the start of the year.

The exchange’s market capitalisation was more than Dh1.9 trillion ($521bn) at the end of trading on Tuesday, more than double the prior-year period.