On December 15, 2023, Quwan Holding Limited (target company, “Quwan Group”) officially submitted a listing application to the Hong Kong Stock Exchange and application documents relating to Vision Deal HK Acquisition Corp (SPAC, 07827.HK, hereinafter “Vision Deal”) for a special purpose acquisition company merger and acquisition transaction (de-SPAC).
https://www1.hkexnews.hk/app/sehk/2023/106024/documents/sehk23121501546_c.pdf
On December 8, 2023, VISION DEAL announced the conclusion of a merger agreement with Quwan Group and a PIPE investment agreement with PIPE investors. PIPE investors include Zheshang International, Oriental Asset Management, Guangdong Finance Hong Kong International, China Arbitrage Fund, Taizhou Tongsheng Shifu, 37 Starseek, Blue Cursor International, SensePower Management, Modern Leaves, Galaxy Link, Admeliora Limited, Chinese Culture Investment, and PIPE individual investors. PIPE's individual investors, including Ms. Su Yu, Mr. Xiao Yucheng (founder and chairman of Shenzhen Youwei Technology Co., Ltd.), Ms. Ye Lian (a certified public accountant in Virginia, USA, and qualified to work in fund management in China), Mr. Tai Xiaoyang (a well-known artist with over 40 years of experience in ancient Chinese landscape painting), Mr. Shi Yonglei (founder and chairman of Lai Yifen Co., Ltd.), Mr. Cui Jinfeng (Executive Director of Wuhan Shanshui Private Equity Fund Co., Ltd.), Mr. Zhou Tong (Deputy General Manager of Wuxi Tianlian Chemical Co., Ltd.) 603777.SH Mr. William Richard Vanbergen (founder and executive director of a quality international education group).
According to the PIPE investment agreement, the total purchase price of PIPE investors is approximately HK$576 million (which can be adjusted to a maximum of HK$610 million), the price of each PIPE investment share is HK$10.0 million, and the total proceeds are HK$576 million to HK$610 million, depending on adjustments made when the target is determined and the final valuation is agreed upon before delivery.
The target sale shareholders agreed to the sale and Vision Deal agreed to acquire about 4.32% of the target company's shares at a total cost of HK$298 million. It will be mainly paid from PIPE's investment proceeds and the proceeds from the special purpose acquisition company's initial public offering. The total equity value of the share transfer was approximately HK$6.892 billion (not a successor to the company's equity value after completion of DE-SACP). The target sale of shareholders includes Matrix Partners, Skycus China Fund, Dream League, and Image Frame controlled by Tencent (00700.HK).
Before the share transfer is completed, Quman Group will implement a share conversion. According to this, the target sale of shares, which were previously preferred shares of the Quwan Group, will be converted into Quman Group common shares.
The target consolidated total equity value is approximately HK$8.215 billion after the effective time (listing date):
Assuming all Class A shareholders of SPAC company are redeemed, the target company shareholders hold 89.89% of the shares, PIPE investors hold 7.24% shares, the sponsor (excluding VKC Management) holds 2.87% of the shares, and VKC Management, a wholly-owned subsidiary of Mr. Wei Zhe (intended to be the successor company's non-executive director), holds 1.29% of the shares.
Assuming that all of SPAC's Class A shareholders are unredeemed, the target company's shareholders hold 80.38% of the shares, PIPE investors hold 6.46% of the shares, SPAC's Class A shareholders hold 10.60%, the sponsor (excluding VKC Management) holds 1.41% of the shares, and VKC Management holds 1.15% of the shares.
The corporate structure of the successor group is as follows (assuming all of SPAC's Class A shareholders are redeemed):
Quwan Group is China's leading interest-driven mobile social networking platform dedicated to connecting Gen Z users. With its diverse product features and functions, it encourages relationships and social interaction among users who are mainly game enthusiasts by providing services and functions that improve the gaming experience. Further enhance the establishment of social relationships among its users through voice-based and other real-time interactive and entertaining content. According to data from Frost & Sullivan, based on revenue in 2022, Quman Group is the largest mobile voice social networking platform in China and the largest social networking platform for mobile game users in China.