The total value of M&As, private equity, and venture capital deals, and initial public offerings (IPOs) in Singapore, Malaysia, and Indonesia stood at $280 billion across 1,800 deals between December 2020 and November 2021, according to a new report by the research firm Duff & Phelps.
Transactions this year were 3.3 times the $84 billion recorded last year, amid pent-up demand and greater exit opportunities, according to the report titled ‘Transaction Trail Report 2021’.
Singapore accounted for the majority of 2021’s transactions (63.3% by volume) although Indonesia and Malaysia saw more initial public offerings (IPOs) in the period.
Srividya Gopal, a managing director at Duff & Phelps told DealStreetAsia that 2020 saw a bottleneck in transactions, but investors became used to closing deals virtually in 2021. Many private equity and venture capital firms, which invested in startups in the last four to five years have a strong need for exits in order to seek returns and reinvest their capital.
The outlook for the first half of 2022 looks robust, Gopal said, as there are still some listings, de-SPACs, and M&As in the pipeline. “We may not see another record year like 2021, but if we touch $100 to $150 billion in deal values, that would still make it a strong year.”
While China’s crackdown on its technology sector may have led to investors turning to Southeast Asia, Gopal said it has been more of a short-term or incremental change than a dramatic upswing. In fact, once Chinese technology regulations are sorted out, activity could pick up again since many institutional investors in Southeast Asia, which have temporarily halted investments in China, will start looking for deals again.
M&A activity
More than $250 billion worth of M&As across over 1,300 deals took place in the three countries, rebounding sharply from 2020’s $74 billion from 798 deals.
Notable M&As in the last year include:
- Grab’s merger with the special purpose acquisition company (SPAC) Altimeter Growth Corp valued at $39.6 billion
- GIC’s participation in two big buyouts — medical supply company Medline Industries for $34 billion, and cybersecurity firm McAfee for $12 billion,
- the $12 billion proposed merger between Malaysia’s Digi.Com and Celcom Axiata, and
- Indonesia’s Gojek and Tokopedia’s $18 billion merger
Asia-Pacific accounted for 23% of global M&As in the year.
PE and VC deals
Private equity and venture capital fundraising activity recovered strongly amid greater digitalisation in the region.
More than $24 billion was raised — almost three times more than in 2020, and the highest since 2017 — across 450 deals in the three countries. Technology deals accounted for 64% of all investments.
Southeast Asia minted at least 21 unicorns in 2021 alone, according to DealStreetAsia DATA VANTAGE‘s Private Capital Markets Report 2021. Since the report, Sky Mavis has also reached a valuation of more than $1 billion. This is nearly the same number of unicorns made between 2013 and 2020.
Other companies said to have surpassed a valuation of more than $1 billion are Kopi Kenangan and Sociolla, according to sources DealStreetAsia previously spoke to.
The biggest fundraises include Grab’s $4 billion private placement as part of its SPAC merger, J&T Express’ $1.8 billion raise in April, GoTo’s recent $1.3 billion pre-IPO round, and large deals of more than half a million each from unicorns Emeritus, Trax, and Ninja Van.
IPOs
Indonesia dominated the IPO market with 51 public listings that raised $3.8 billion this year. The archipelago accounted for 66% of the total IPOs among the three countries.
The biggest listings in Indonesia and the region came from Bukalapak and Mitratel, which raised $1.5 billion and $1.3 billion respectively.
Listings in Singapore, which saw 10 IPOs raising $1.3 billion, were dominated by real estate investment trusts, or REITs.
While listings in Singapore were subdued, many tech companies headquartered or registered in the country looked overseas to list. Besides Grab, other companies that have agreed to merge with a SPAC include crypto mining platform Bitdeer, which plans to merge with Blue Safari Group Acquisition Corp in a $4 billion deal; SES Holdings; Kredivo’s FinAccel; and PropertyGuru.
The US still dominates the SPAC market with 728 SPAC listings in 2020 and 2021. Only nine and three SPAC listings originated from Singapore and Malaysia that raised $1.1 billion and $425 million respectively during the same period.
Some of these SPACs include L Catterton Asia Acquisition Corp’s listing on the Nasdaq targeting high-growth consumer technology companies in Asia that raised $250 million, and Catcha Investment Corp’s SPAC that raised $275 million looking for a “new economy” company in Southeast Asia or Australia.
“With the launch of the SPAC regime by the Singapore Exchange recently, we expect to see an even more robust pipeline for SPAC listings and de-SPAC transactions in the near future,” said Gopal.
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