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Altimeter Growth Corporation

Altimeter Growth Corporation

Oct 19, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Grab Holdings Inc. (“Grab”)

ENTERPRISE VALUE: $31.265 billion
ANTICIPATED SYMBOL: GRAB

Altimeter Growth Corporation proposes to combine with Grab Holdings Inc. (“Grab”) Southeast Asia’s leading superapp. 

Southeast Asia is one of the fastest growing digital economies in the world, with a population approximately twice the size of the United States. Yet online penetration for food delivery, on-demand mobility and electronic transactions are a fraction of the U.S. and China. Across online food delivery, ride-hailing and digital wallet payments, Grab expects its total addressable market to grow from approximately US$52 billion in 2020 to more than US$180 billion by 2025.

Grab believes it is perfectly positioned to serve the needs of consumers, merchants and drivers in Southeast Asia through its superapp strategy. It offers an ecosystem of complementary services, addressing high-frequency, everyday needs, all through one app. This creates a flywheel effect designed to drive growth while lowering cost of service. The more services offered, the more the choices, and consequently the greater the value to consumers using the Grab superapp. In fact, the proportion of Grab users that use 2 or more services has grown 5 times over the last two years4. As consumer spend grows, so do the income opportunities for Grab’s merchant and driver-partners, encouraging more of them into Grab’s ecosystem. This leads to wider selection, better value, and faster delivery times for users, with benefits to consumer loyalty and lifetime value.

Grab posted GMV of approximately US$12.5 billion in 2020, surpassing pre-pandemic levels and more than doubling from 2018. The company is also currently the category leader in Southeast Asia for its core verticals5, accounting for approximately 72% of total regional GMV for ride-hailing, 50% of total regional GMV for online food delivery and 23% of regional TPV for digital wallet payments in 2020.

Highlights:

  • Grab is relied on for everyday needs in Southeast Asia and is the category leader for online food delivery, ride-hailing and digital wallet payments2 in the region
  • Public listing will reinforce Grab’s strong business momentum including Gross Merchandise Value of approximately US$12.5 billion in 2020, surpassing pre-pandemic levels
  • The proposed transactions represent an expected equity value on a pro-forma basis of approximately US$39.6 billion and are expected to provide up to approximately US$4.5 billion in cash proceeds to Grab
  • Proceeds include more than US$4.0 billion of fully committed PIPE led by US$750 million from funds managed by Altimeter Capital Management, LP
  • Investors in the PIPE include funds and accounts managed or advised by BlackRock, Counterpoint Global (Morgan Stanley Investment Management) and T.Rowe Price Associates, Inc., as well as Fidelity International, Fidelity Management and Research LLC, Janus Henderson Investors, Mubadala, Nuveen, Permodalan Nasional Berhad and Temasek
  • Altimeter commits to a three-year lock-up period for its sponsor promote shares, 10% of which will go to the recently announced GrabForGood Fund to support programs with long-term social and environmental impact

TRANSACTION

  • The combined company is expected to have an equity value on a pro-forma basis of approximately US$39.6 billion.
  • At closing, the combined company is expected to receive approximately US$4.5 billion in cash proceeds, including more than US$4.0 billion from a fully committed PIPE offering that was upsized due to significant investor interest.
  • Furthermore, Altimeter has also committed up to US$500 million to a contingent investment to be equal to the aggregate dollar amount of redemptions from Altimeter Growth’s shareholders.
  • The PIPE was led by funds managed by Altimeter Capital Management, LP which committed US$750 million, with participation from funds and accounts managed or advised by BlackRock, Counterpoint Global (Morgan Stanley Investment Management), and T.Rowe Price Associates, Inc., as well as Fidelity International, Fidelity Management and Research LLC, Janus Henderson Investors, Mubadala, Nuveen, Permodalan Nasional Berhad and Temasek.
    • Leading family groups from Indonesia including Djarum, the Sariaatmadja family and Sinar Mas also participated in the PIPE.
  • Altimeter’s sponsor promote shares are subject to a 3-year lock-up period.
  • Altimeter is also donating 10% of its sponsor promote shares to support the GrabForGood fund, which aims to introduce programs with long-term social and environmental impact, including education, financial support for underserved communities and environmental issues.
    • The GrabForGood fund was announced last week with an initial fund size of US$275 million, including a personal contribution of US$25 million in Grab shares from Grab Group CEO and co-founder Anthony Tan, together with co-founder Hooi Ling Tan and President Ming Maa.

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PIPE

  • 404,000,000 Class A ordinary shares for a purchase price of $10.00 per share, for aggregate gross proceeds of $4,040,000,000
  • The PIPE was led by funds managed by Altimeter Capital Management, LP which committed US$750 million, with participation from funds and accounts managed or advised by BlackRock, Counterpoint Global (Morgan Stanley Investment Management), and T.Rowe Price Associates, Inc., as well as Fidelity International, Fidelity Management and Research LLC, Janus Henderson Investors, Mubadala, Nuveen, Permodalan Nasional Berhad and Temasek.
    • Leading family groups from Indonesia including Djarum, the Sariaatmadja family and Sinar Mas also participated in the PIPE.

BACKSTOP

  • Sponsor Affiliate will agree to backstop SPAC Share Redemptions, and to the extent such backstop is required will agree to subscribe for and purchase that number of PubCo Class A ordinary shares to be determined in accordance with the terms of the Backstop Subscription Agreement.

FORWARD PURCHASE

  • Sponsor Affiliate has agreed to purchase units consisting of 17,500,000 PubCo Class A ordinary shares and 3,500,000 PubCo warrants for an aggregate price equal to $175,000,000 immediately prior to the closing.
  • JS Capital LLC (“JS”) has agreed to purchase units consisting of 2,500,000 PubCo Class A ordinary shares and 500,000 PubCo warrants for an aggregate price equal to $25,000,000 immediately prior to the closing.

LOCK-UP

  • Altimeter’s sponsor promote shares are subject to a 3-year lock-up period.

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GRAB VOTING SUPPORT AND LOCKUP AGREEMENTS

  • (Docs not filed yet) Altimeter, PubCo, Grab and certain of the shareholders of Grab entered into customary voting support and lock-up agreements (the “Grab Voting Support and Lock-Up Agreements”), pursuant to which certain shareholders who hold an aggregate of at least 67% of the outstanding Grab voting shares have agreed, among other things:
    • (a) to appear for purposes of constituting a quorum at any meeting of the shareholders of Grab called to seek approval of the transactions contemplated in the Business Combination Agreement and the other transaction proposals,
    • (b) to vote in favor of the transactions contemplated by the Business Combination Agreement and other transaction proposals and
    • (c) to vote against any proposals that would materially impede the transactions contemplated by the Business Combination Agreement or any other transaction proposal, and
    • (d) to not sell or transfer any of their shares.

NOTABLE CONDITIONS TO CLOSING

  • PubCo shall have received proceeds from the PIPE Financing and under the Sponsor Subscription Agreement in an amount equal to at least $2.5 billion

NOTABLE CONDITIONS TO TERMINATION

  •  by either Altimeter or Grab if the Business Combination is not consummated by the date that is 270 days after the date of the Business Combination

ADVISORS

  • Evercore acted as lead financial advisor to Grab.
  • J.P. Morgan and Morgan Stanley Asia (Singapore) Pte were co-advisors to Grab.
  • J.P. Morgan and Morgan Stanley & Co. LLC acted as lead placement agents, with Evercore and UBS as co-placement agents to Altimeter Growth on the PIPE.
  • Skadden, Arps, Slate, Meagher & Flom LLP and Hughes Hubbard & Reed LLP acted as legal advisors to Grab.
  • Ropes & Gray LLP acted as legal advisor to Altimeter Growth.
  • Wilmer Cutler Pickering Hale and Dorr LLP acts as legal advisor to Altimeter Capital Management LP and Altimeter Capital Markets, which includes Altimeter Growth.
  • Cooley LLP acted as legal advisor to the placement agents.

MANAGEMENT & BOARD

Executive Officers

Brad Gerstner, 49
Chairman, Chief Executive Officer and President

Mr. Gerstner founded Altimeter in 2008 with a mission to build a leading technology focused investment firm and serves as its Chief Executive Officer. Prior to founding Altimeter, Mr. Gerstner was a founding principal at General Catalyst and led technology and internet investments at PAR Capital. Mr. Gerstner is also an operator after founding and leading multiple online search businesses with successful exits, including acquisitions by Interactive Corp, Marchex and Google. Mr. Gerstner currently serves on the board of directors of iHeartMedia. He received his undergraduate degree from Wabash College, a J.D. from Indiana University School of Law and an MBA from Harvard Business School.

Hab Siam, 50
General Counsel and Director

Mr. Siam also currently serves as Altimeter’s General Counsel and Chief Compliance Officer. Prior to Altimeter, Mr. Siam served as Financial Services Counsel in Washington, DC for Illinois 10th District Congressman Robert Dold, a member of the House Financial Services Committee. Mr. Siam also served as General Counsel and Corporate Secretary for NextG Networks, Inc. and as Corporate Lawyer at Wilson Sonsini Goodrich & Rosati and Kirkland & Ellis. He received his undergraduate degree from University of Illinois and a J.D from Indiana University School of Law.

 

Board of Directors

Richard N. Barton, 53
Director 

Mr. Barton is the co-founder of Zillow Group, Inc. (“Zillow”) and has served as its Chief Executive Officer since February 2019. Mr. Barton has been a member of Zillow’s board of directors since its inception in December 2004, served as its Chief Executive Officer from inception until September 2010 and served as its Executive Chairman from September 2010 to February 2019. Mr. Barton served as a venture partner at Benchmark, a venture capital firm, from February 2005 through September 2018. Prior to co-founding Zillow, Mr. Barton founded Expedia as a group within Microsoft Corporation in 1994. Microsoft spun out the group as Expedia, Inc. in 1999, and Mr. Barton served as Expedia’s President, Chief Executive Officer and as a member of its board of directors from 1999 to 2003. Mr. Barton also co-founded and served as Non-Executive Chairman of Glassdoor from June 2007 through the company’s acquisition in June 2018. Mr. Barton has served on the board of directors of Netflix, Inc. since 2002; and Qurate Retail, Inc. (formerly Liberty Interactive Corporation) since 2016. Mr. Barton holds a B.S. in General Engineering: Industrial Economics from Stanford University.

Aishetu Fatima Dozie, 44
Director 

Ms. Dozie is the Founder and Chief Executive Officer of Bossy Cosmetics, Inc. (“Bossy Cosmetics”), a mission-driven cruelty-free beauty company. Prior to founding Bossy Cosmetics in 2018, Ms. Dozie served as a Fellow at the Distinguished Careers Institute at Stanford University. Previously, Ms. Dozie served as General Manager and Head of Investment Banking, West Africa at Rand Merchant Bank from 2015 until 2017. Prior to Rand Merchant Bank, Ms. Dozie has worked for Lehman Brothers, Morgan Stanley and Standard Chartered Bank as a senior investment banking executive. Ms. Dozie has also worked at the World Bank in Washington, DC, where she focused on financing businesses in the manufacturing, infrastructure, and service sectors in regions such as Central and South America, Eastern Europe, and Eastern Africa. In addition, Ms. Dozie founded a first-of-its-kind children’s play and activity center in Lagos, Nigeria and authored a children’s picture book entitled “Paloo & Friends in Imaginaria.” Ms. Dozie recently executive produced an online television series named “African HERstory,” where she interviewed successful female African executives to highlight their impact on the continent’s development. Ms. Dozie holds a B.A. in Economics from Cornell University and an M.B.A from Harvard Business School and participated in the Leaders in Development Program at the John F. Kennedy School at Harvard University.

Dev Ittycheria, 53
Director

Mr. Ittycheria serves as President, Chief Executive Officer and as a member of board of directors of MongoDB, Inc. (“MongoDB”) since September 2014. Prior to joining MongoDB, Mr. Ittycheria served as a Managing Director at OpenView Venture Partners, a venture capital firm, from October 2013 to September 2014. From February 2012 to June 2013, Mr. Ittycheria served as Venture Partner at Greylock Partners, a venture capital firm. From April 2008 to February 2010, Mr. Ittycheria served as President-Enterprise Management at BMC Software, Inc., a computer software company, which he joined in connection with its acquisition of BladeLogic, Inc., a computer software company that Mr. Ittycheria co-founded and for which he served as Chief Executive Officer. Mr. Ittycheria currently serves as lead independent director of the board of directors of Datadog, Inc., a public software company. Mr. Ittycheria previously served on the boards of directors of Bazaarvoice, Inc., a public software company (January 2010 to August 2014); athenahealth, Inc., a public cloud-based services company (June 2010 to February 2019); and AppDynamics, Inc., a private software company (March 2011 until its acquisition by Cisco Systems, Inc. in March 2017). Mr. Ittycheria received his B.S. in Electrical Engineering from Rutgers University.

ByRoman Developer