Synagistics set for Hong Kong listing through merger with SPAC backed by former HKMA head

Synagistics, a digital commerce service provider in Southeast Asia, is set for a listing in Hong Kong via a merger with a special-purpose acquisition company (SPAC) backed by the former head of Hong Kong's de facto central bank.

The Singapore-headquartered company will merge with HK Acquisition Corp, a SPAC formed by Norman Chan Tak-lam, the former CEO of the Hong Kong Monetary Authority (HKMA), along with two family members of the city's former chief executive Donald Tsang Yam-kuen, according to an exchange filing after the market close on Friday. The deal values Synagistics at HK$3.5 billion (US$448 million).

The agreement comes with a private investment in public equity (PIPE) with nine investors, including a fund managed by Oakwise Capital Management and a subsidiary of Hong Kong Telecommunications, according to the filing. The proceeds from the PIPE will be HK$601 million.

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Haitong International Capital and CMB International Capital have been appointed as the joint sponsors of the deal.

Founded in 2014, Synagistics has provided integrated digital commerce solutions to more than 600 brand partners. It is backed by Alibaba Group Holding, which owns the South China Morning Post, and Gobi Partners, a leading Asia-focused venture capital firm.

It provides data-driven digital commerce solutions to the brands, and also sells their products to consumers directly.

The firm enables sales of its clients' products to consumers in Southeast Asia across digital platforms such as Lazada, Shopee and TikTok by leveraging its stores of data and real-time analytics technology, according to the filing.

Synagistics has benefited from rapidly evolving market opportunities in the digital commerce industry in Southeast Asia. In 2023, it recorded gross profit of S$31.7 million (US$23.4 million), a 3.6 per cent increase from a year earlier. Revenue increased 12.4 per cent to S$126.6 million last year, according to the filing.

Synagistics ranked second among all digital commerce solutions platforms in Southeast Asia in terms of revenue in 2023, according to research from China Insights Industry Consultancy cited in the filing.

Synagistics' and its clients' businesses cover various sectors including fashion and apparel, beauty, wellness and lifestyle. Its geographical presence spans the six major economies in Southeast Asia, namely Singapore, Malaysia, Philippines, Vietnam, Thailand and Indonesia. It has also been strategically expanding its global footprint in markets outside Southeast Asia, such as Hong Kong and Spain.

Former HKMA CEO Norman Chan Tak-lam, pictured at a Chinese University of Hong Kong press briefing in April 2023. Photo: Xiaomei Chen alt=Former HKMA CEO Norman Chan Tak-lam, pictured at a Chinese University of Hong Kong press briefing in April 2023. Photo: Xiaomei Chen>

SPACs are shell companies created to raise financial war chests and buy assets within a limited period of time, usually 18 to 24 months. Hong Kong's stock exchange rolled out rules to permit SPAC deals in 2021 amid a craze for the tactic in the US, although the fad faded in less than two years.

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