Prenetics to Merge With Hong Kong Tycoon Adrian Cheng's SPAC

  • In Business
  • 2021-09-16 02:12:14Z
  • By Bloomberg

(Bloomberg) -- Hong Kong Covid-19 testing laboratory Prenetics Ltd. has agreed to merge with tycoon Adrian Cheng's U.S.-listed blank-check company Artisan Acquisition Corp.

Prenetics has an enterprise value of $1.25 billion in the deal to take it public, according to a statement Thursday. The special purpose acquisition company, or SPAC, is also raising $120 million to support the transaction. Investors in the private investment in public equity, or PIPE, include Aspex, PAG, Lippo, Dragonstone and Xen Capital, among others.

The transaction is estimated to be completed in the fourth quarter this year or the first quarter of 2022, according to the statement. The combined company is expected to trade on the Nasdaq under the symbol PRE.

Prenetics will receive as much as $459 million in cash from the deal, and acquisitions will be a priority going forward, Chief Executive Officer and Co-Founder Danny Yeung said in an interview.

"The U.S. is going to be a priority market for us, as well as Southeast Asia," he said, adding further expansion into the U.K. and Europe to the list.

Backed by Alibaba Group Holding Ltd. and Ping An Insurance Group Co., Prenetics was founded as a genetics and DNA testing company but pivoted to Covid-19 testing when the pandemic began last year. The firm operates in 10 countries and has completed over 5 million Covid-19 tests, including regular testing provided to players and staff in the English Premier League, according to the statement.

Artisan raised $339 million in an initial public offering in May. The SPAC's sponsor, Artisan LLC, was founded by New World Development Co. Chief Executive Officer Cheng, the scion of one of Hong Kong's wealthiest families.

An attractive feature of a SPAC merger was the potential for collaboration with Cheng's companies spanning retail, hospitality and health care, Yeung said.

"Certainly we could have chosen the Hong Kong exchange for an IPO," he added. "Synergies between Adrian's ecosystem propelled us to make the decision to go with the SPAC."

UBS Group AG advised Artisan on the transaction while Citigroup Inc. worked with Prenetics.

(Updates with quotes from Prenetics CEO in fourth, fifth, eighth and ninth paragraphs, and details in the sixth.)

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