SINGAPORE – Shareholders of Temasek-backed Vertex Technology Acquisition Corporation (VTAC) have voted to merge with Taiwanese live-streaming platform 17Live to become Singapore’s first special purpose acquisition company, or Spac, to acquire a target.

At an extraordinary general meeting (EGM) on Dec 1, 95.53 per cent of VTAC shareholders voted for the deal. The meeting, which began at 2pm, was over within an hour.

VTAC will acquire 17Live for around $800.8 million through the issuance of around 162 million new shares at $5 each. If 17Live hits a set financial target, an earnout of 24.4 million new shares at $5 each will be allotted to applicable shareholders, amounting to $122 million. This would take the total acquisition value to a maximum of $922.9 million.

Separately, ahead of the EGM, VTAC shareholders redeemed about 62.53 per cent of the Spac’s share capital.

VTAC shares will resume trading on Dec 4. The counter last traded at $4.79 on Nov 24. Dec 8 will mark the completion of the acquisition and VTAC will begin trading as 17Live Group at 9am on that day.

The VTAC deal is the first acquisition of a target company by a Singapore-listed Spac since 2021, when the Singapore Exchange (SGX) allowed Spacs or “blank cheque” firms to float shares.

Spacs are designed to acquire another company. The entities are set up by a group of investors, known as sponsors. Spacs then raise money through an initial public offering (IPO). At this stage, they have no business operations or stated targets for acquisition. Instead, under SGX’s rules for Spacs, they have two years to acquire a private company – a process also known as de-Spac.

For VTAC, the deadline was coming up in January 2024.

VTAC’s success is important for Singapore, which is facing fierce competition from Hong Kong to become an Asian hub for Spacs. While it lagged behind Singapore in setting up rules and listing its first blank-cheque company, Hong Kong announced its first Spac merger with a target firm in September, involving Aquila Acquisition and Chinese steel trading website ZG Group.

VTAC was Singapore’s first Spac, raising about $200 million in its IPO in January 2022. It is backed by Vertex Venture Holdings, a subsidiary of Singapore’s investment company Temasek.

17Live, which is among Vertex Venture’s portfolio of more than 300 companies, is the No. 1 live-streaming platform in Japan and Taiwan, where live streaming is a growing business and part of the popular culture.

The app makes most of its money when viewers purchase virtual gifts for their preferred streamers in the app. The streamers then sell these virtual gifts back to the platform under a revenue-sharing model and based on a mutually agreed upon ratio.

17Live owns the technology behind an Internet platform where aspiring individuals can sing, experiment with make-up and fashion, cook or play games, among other things, while interacting with their followers in real time.

This platform enables communities to form among like-minded individuals and provides a convenient and affordable avenue of entertainment for a diverse user base.

The platform’s main growth driver is expected to be its V-Liver technology, which enables streamers to live-stream via an animated avatar on their mobile phones. In Japan, V-Liver has a 41.2 per cent projected average annual growth rate between 2023 and 2027, according to information supplied by the company.

For the first half of 2023, revenues totalled US$151 million (S$202 million), down by around 25 per cent from US$200.4 million during the same period a year ago. The company posted a loss of US$118.2 million for the first half compared with US$42 million a year ago.

Singapore has two other listed Spacs – Pegasus Asia and Novo Tellus Alpha Acquisition – which also face a January 2024 deadline to make a business combination.

Spacs were all the rage in the United States in 2020 and 2021, but the fervour has died down as regulatory issues and quality concerns emerged.