Trading platform eToro to go public via SPAC merger in $10B deal

Multi-asset investing and trading platform and Robinhood competitor eToro announced Tuesday it will go public via a merger with SPAC FinTech Acquisition Corp. V in a massive $10.4 billion deal.

Once the transaction closes sometime in the third quarter, the combined company will operate as eToro Group Ltd. and is expected to be listed on the Nasdaq exchange.

The 14-year-old Israeli company was founded on a &ldquo vision of opening up capital markets.&rdquo It launched its platform in the U.S. just over two years ago and has seen rapid growth as of late. Last year, eToro said it added over 5 million new registered users and generated gross revenues of $605 million, representing 147% year-over-year growth. In January alone, the company added over 1.2 million new registered users and executed more than 75 million trades on its platform. That compares to 2019 when monthly registrations averaged 192,000 and 2020 when they grew to 440,000.

eToro said its platform is capitalizing on a number of secular trends such as the rise of digital wealth platforms, growing retail participation and mainstream crypto adoption. The company no doubt benefitted from the recent rise in retail investment interest, and in consumer investment apps and services specifically, which resulted from the so-called &ldquo meme stock&rdquo activity that began with Redditors trading GameStop stock in order to frustrate institutional short sellers.

The platform, which spans &ldquo social&rdquo stock trading and cryptocurrency exchange, in November 2019 acquired Delta, the crypto portfolio tracker app. EToro claims to be one of the first regulated platforms to offer crypto-assets. Its platform is regulated in the U.K., Europe, Australia, the U.S. and Gibraltar.

The transaction includes commitments for a $650 million common share private placement from leading investors including ION Investment Group, SoftBank Vision Fund 2, Third Point LLC, Fidelity Management & Research Company LLC and Wellington Management. The overall $10.4 billion implied equity value of the merger arrangement includes an implied enterprise value for eToro of $9.6 billion.

EToro currently has over 20 million registered users across 100 countries, and its social community is rapidly expanding due to the growth of its total addressable market, supported in part by secular trends such as the growth of digital wealth platforms and the rise in retail participation.

It expects to receive approval from FINRA for a broker-dealer license, with plans to launch stocks in the U.S. in the second half of 2021. In a written statement, FinTech V chairman Betsy Cohen said that its sponsor platform Fintech Masala seeks out companies &ldquo with outsized growth, effective controls and excellent management teams.&rdquo

&ldquo EToro meets all three of these criteria,&rdquo she added. &ldquo In the last few years, eToro has solidified its position as the leading online social trading platform outside the U.S., outlined its plans for the U.S. market and diversified its income streams. It is now at an inflection point of growth, and we believe eToro is exceptionally positioned to capitalize on this opportunity.&rdquo

The maker of Chang beer announced early Friday that it had received a no-objection letter from Singapore Exchange Securities Trading in relation to the proposed  spin-off  listing of its brewery business. Shares rose as much as 4.4% in early trading, surging the most since November.

The brewer, owned by Thai tycoon Charoen Sirivadhanabhakdi, will sell  up to  about 20% of the total number of issued ordinary shares of BeerCo Ltd. A float could raise around  $2 billion,  according to people familiar with the transaction who asked not to be identified as they are not authorized to speak publicly. A representative for the company declined to comment on the size of the float.

The announcement to list the brewery unit will be a &ldquo massive&rdquo boost for Singapore-listed ThaiBev&rsquo s shares, said Nirgunan Tiruchelvam, head of the consumer sector equity research at Tellimer.

Because ThaiBev is the second-largest beer producer in Thailand and the largest in Vietnam, the beer unit&rsquo s assets are &ldquo exemplary&rdquo , he added.

ThaiBev&rsquo s IPO of its brewery unit could be the Singapore bourse&rsquo s biggest since Hutchison Port Holdings Trust raised $5.5 billion in 2011. It would also buoy first-time share sales in the Southeast Asian country. IPO volumes plunged to $915 million last year, the lowest since 2015, according to data compiled by Bloomberg. There have yet to be any IPOs in the Southeast Asian nation this year.

ThaiBev had initially planned to  spin off  its brewery unit last year, but the plan was put on hold after the coronavirus pandemic hit its business, with bars and restaurants closing and alcohol sales banned, people familiar with the matter have said. The planned IPO will likely value the brewery unit at about $10 billion.

ThaiBev is best known for producing Chang, a lager whose green bottles are adorned with an image of two elephants. It also brews Archa beer and the German-inspired Federbrau brand. In 2017, ThaiBev&rsquo s Vietnamese affiliate bought a controlling stake in Saigon Beer Alcohol Beverage Corp., the country&rsquo s largest brewer, for about $4.8 billion.

The beer business to be listed had revenues of nearly S$4.7 billion ($3.5 billion) for the fiscal year ending September 30, with profits after taxes of about S$348 million.

Apart from the brewery business, ThaiBev runs distilleries that produce liquor, including SangSom rum, Meridian brandy and Drummer whiskey. It owns about 28% of Singapore&rsquo s Fraser & Neave Ltd., which sells 100Plus soft drinks and Magnolia dairy products, data compiled by Bloomberg show.

Charoen is Thailand&rsquo s richest person with a net worth of about $16.3 billion, according to the Bloomberg Billionaires  Index.