ADC Acquisition Corporation has agreed to acquire Abu Dhabi-based United Printing and Publishing, in what would be the region's first special purpose acquisition company merger deal.
ADC is the UAE's first Spac, or blank-cheque company. Spacs have no commercial operations and trade without business fundamentals.
The transaction will see UPP get Dh1.1 billion ($299 million) of new cash from ADC.
ADC, which was set up by the Abu Dhabi holding company ADQ and private investment firm Chimera Investments, also plans to raise Dh734 million from private investment in public equity, it said late on Tuesday in a filing to the Abu Dhabi Securities Exchange (ADX).
The deal values UPP at Dh600 million, ADC said. After the merger, UPP will become a publicly-listed company on the ADX.
“As the region's first Spac merger process, this transaction marks a notable achievement for ADC,” chief executive Seif Fikry said.
“We are confident that UPP represents an attractive platform with strong and stable revenue through its long-term contracts and relationships with anchor customers, such as UAE government entities.
“UPP’s high revenue visibility provides a robust foundation for future growth.”
Spacs are formed with the intention of raising funds, through an initial public offering, to acquire existing companies. Spac-led IPOs have lighter disclosure requirements than regular ones and have increasingly been used over the past three years to take fast-growing companies public quickly.
There were 86 Spac IPOs in 2022, which raised a combined $13.42 billion, according to S&P Global Market Intelligence data.
Established in April last year, ADC is a Spac tasked with identifying high-growth businesses with attractive valuations.
ADQ will be issued 62.3 million new class A shares in ADC for Dh10 each, implying an equity value of Dh623 million for UPP, ADC said.
UPP, which was set up in 2006 and operates in segments with large end-markets, plans to grow its presence internationally and domestically.
“With this transaction, UPP will be able to significantly accelerate the execution of its organic and inorganic growth strategies,” chief executive Ali Al Nuaimi said.
“Our confidence in the growth prospects of our secure printing offering is unwavering, and it will be further supported by additional, more diversified revenue streams, such as sustainable packaging.”