Hong Kong - Recently, TickerWin, the leading market research firm, has released a research report "VIYI Algorithm, Valued at $400 Million, Will Be Merged with Venus, High-Quality Enterprises Enter Global Capital Markets Through SPAC ". Recently, Special Purpose Acquisition Company (SPAC) have become a boom sweeping global capital markets. In March, the LSE planned to introduce a series of reforms, including the introduction of the SPAC listing mechanism.
On September 2, the Singapore Exchange officially issued the listing rules on the main board market, becoming the third Asian stock exchange to introduce SPAC after the stock exchanges of South Korea and Malaysia;
On September 17, the Hong Kong Stock Exchange published a consultation document to solicit market advice on the proposed implementation of the SPAC listing mechanism in Hong Kong for 45 days. The main contents involved the qualification of SPAC investors and sponsors, fund-raising scale, new listing rules, share redemption and liquidation division, etc;
On September 27, the Tokyo Stock Exchange also announced that it would form the SPAC Research Group.
"The world's major exchanges are actively promoting and improving the SPAC system and behind this is the competition for quality companies."Open source securities president assistant and institute director Sun Jinju said. Not only is SPAC very attractive to founders and public investors for its potential high returns, but its advantages in terms of speed and ease of listing have also attracted many quality companies to go public in the form of SPAC. In order to prevent the outflow of high-quality companies and enhance their own attraction, many capital markets quickly follow up the SPAC mechanism for high-quality assets.
SPAC (Special Purpose Acquisition Company) is a listed "shell company" formed by mutual funds, hedge funds without any other business. The sole purpose of its establishment is to acquire an unlisted company with promising development prospects within a preset period after the listing to realize the financing and listing of the latter.
In recent years, data show that SPAC listing cases have increased exponentially. In 2020, the US stock market SPAC IPO successfully issued 248 companies, up 320.0% year on year, accounting for 55.1% of all IPO issues, surpassing the traditional IPO for the first time. In 2020, SPAC IPO raised US $83 billion, accounting for 46.47% of the total IPO funds raised in the same period. By the first quarter of 2021, the number of SPAC IPO and fundraising scale of the US market both far exceeded that of traditional IPO. In the quarter, SPAC IPO raised US $99.6 billion, while the traditional IPO raised just US $55.565 billion in the same period.
According to the report, Venus Acquisition Corporation (Nasdaq: VENA) ("Venus"), a publicly traded special purpose acquisition company, and VIYI Algorithm Inc. ("VIYI Algo"), a Cayman Islands exempted company and controlled by WiMi Hologram Cloud, Inc. (NASDAQ: WIMI), announced today that they have entered into a definitive merger agreement. A newly created merger subsidiary of Venus will be merged with and into VIYI Algo with VIYI Algo being the surviving entity and becoming a wholly owned subsidiary of Venus. Upon closing of the transaction, Venus will change its name to MicroAlgo Inc.
The merger is structured as a stock for stock transaction and is intended to qualify as a tax-free reorganization. The terms of the merger provide for a valuation of VIYI Algo and its subsidiaries and businesses of US $400,000,000.
VIYI is dedicated to the development and application of bespoke central processing algorithms. VIYI provides comprehensive solutions to customers by integrating central processing algorithms with software or hardware, or both, thereby helping them to increase the number of customers, improve end-user satisfaction, achieve direct cost savings, reduce power consumption, and achieve technical goals. The range of VIYI's services includes algorithm optimization, accelerating computing power without the need for hardware upgrades, lightweight data processing, and data intelligence services. VIYI's ability to efficiently deliver software and hardware optimization to customers through bespoke central processing algorithms serves as a driving force for VIYI's long-term development.
Currently, VIYI is focused on developing and delivering central processing algorithm solutions to customers engaged in internet advertisement and gaming, and intelligent chips. Moreover, VIYI's customer base is rapidly growing due to a general demand for more efficient data processing in various industries driven by the growing internet population and prevalence of AI. According to the CIC Report, revenue of central processing algorithm services derived from internet advertisement and online gaming alone grew from RMB 2.2 billion in 2016 to RMB 6.9 billion in 2020, representing a CAGR of 32.7%. This market is expected to maintain a rapid growth trend, expanding at a CAGR of 15% during the period from 2020 to 2025.
In the mid-to-long term, VIYI will continue to adhere to its strategic mindset. By improving upon each iteration of VIYI's one-stop intelligent data management solutions made possible by its proprietary central processing algorithm services, VIYI can help customers to enhance their service efficiency and make model innovations in business, and actively enhance the industry value of the central processing algorithm services in the general field of data intelligent processing industry.
What is the attraction of SPAC?
For promoters, SPAC has relatively low early investment and extremely high return on investment. Usually the sponsors return up to 9-10 times the input. For private equity sponsors, compared with the traditional way of raising funds, SPAC can play the advantages of private equity funds in finding investment targets, executing transactions and effectively promoting the growth of the invested companies.
SPAC can serve as a financing tool beyond traditional acquisition funds.
The process of SPAC raising funds is simpler than that of general funds.
For private companies that are seeking a fast listing and want to reduce the uncertainty of the listing process, the listing through SPAC is fast and has great certainty.
What are the advantages of SPAC transaction listings?
SPAC transaction listings are suitable for companies that want certainty and the ability to go public quickly, or those that want to benefit from an experienced management team put together by SPAC sponsors. More and more startups are choosing to go public through SPAC.
In contrast, in the traditional IPO listing, per-share pricing needs not to be determined until the end of the IPO process, so the traditional IPO is more suitable for companies that are confident enough about the certainty of listing and valuation.
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