AVAN Avanti Acquisition Corp Could They Bring Klarna To Stock Market?


500M – 575Murse


We intend to identify and acquire one or more businesses across various industries in Europe, with a strong U.S. nexus and international reach. We believe this regional focus offers a differentiated investment opportunity to our shareholders. We plan to leverage our team’s European sourcing channels and extensive relationships within the business and financial community to build a pipeline of business combination opportunities.

Possible Targets From Team BackGround

In the public markets, NNS Group or NNS UK Group are most notably:

  a significant shareholder in adidas AG;
  a significant shareholder in Arkema S.A., a French listed specialty chemicals business;
  the largest shareholder in OCI N.V., a leading fertilizer and chemicals company listed on the Amsterdam stock exchange;
  the largest shareholder in Orascom Construction PLC, a leading engineering, procurement and construction contractor listed on Nasdaq Dubai and on the Egyptian Stock Exchange; and
  a significant shareholder in Signature Aviation PLC, a U.K. listed air transportation services provider with a focus on the business jet and private aircraft market.

NNS Group has also invested in excess of approximately $2 billion over the past two years across more than ten companies in the technology, software and media space in the United States, Europe and China. In the private markets, some of NNS Group’s or NNS UK Group’s significant investments include:

  the co-ownership alongside another prominent U.S. based investor of Aston Villa Football Club, the largest professional soccer club of Birmingham, the second largest city in England;
  being a significant shareholder in Babylon Health (Babylon Holdings Ltd.), a technology and artificial intelligence for healthcare start-up company, valued in excess of $2 billion as of August 2019; and
  being a significant shareholder alongside other like-minded institutions in the 2019 landmark real estate transaction pursuant to which they jointly acquired a 48.5% interest of a joint venture investment vehicle with Vornado, which owns an upper Fifth Avenue and Times Square, New York City, retail real estate portfolio valued by the transaction at $5.56 billion.

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1/27/2021Nassef Sawiris, GBL Backing Makes Avanti Acquisition The Best Kind Of SPAC (Pending:AVAN) | Seeking Alphahttps://seekingalpha.com/article/4401319-nassef-sawiris-gbl-backing-makes-avanti-acquisition-best-kind-of-spac?utm_campaign=twitter_automated&…1/10Nassef Sawiris, GBL Backing Makes AvantiAcquisition The Best Kind Of SPACJan. 27, 2021 12:40 PM ET|Avanti Acquisition Corp. (AVAN)|GBLBF|1 Comment|2 LikesRamon Vredeling458Followers|SummaryEgyptian billionaire Nassef Onsi Sawiris and French entrepreneur Ian Gallienne, Co-CEO of Groupe Bruxelles Lambert (OTCPK:GBLBY), are betting their blank-checkcompany can stand out from a crowded market by focusing on European targets. AvantiAcquisition Corp (AVAN) is pitching its focus on family and founder-led European targetsto investors. So far, it seems to be working. In August, Avanti Acquisition raised a $600million IPO with Kirkland & Ellis as advisors, up from the initial target of $500 million.IPO AnalysisBioFollowAvanti Acquisition pitching its focus on family and founder-led European targets.Merger talks with European targets can’t be verified at this time from credible sources,but useful to monitor closely.On its website, Avanti Acquisition refers to sponsors NNS Group and Sienna Capitalas its founders.NNS Group is owned by Egypt’s wealthiest family and Sienna Capital is a wholly-owned subsidiary of Groupe Bruxelles Lambert, a well-known extremely diversifiedinvestment holding company.Avanti’s stellar management team, headed by billionaire CEO Nassef Sawiris, plansto acquire one or more businesses across various industries in Europe, with a strongU.S. nexus and international reach.1/27/2021Nassef Sawiris, GBL Backing Makes Avanti Acquisition The Best Kind Of SPAC (Pending:AVAN) | Seeking Alphahttps://seekingalpha.com/article/4401319-nassef-sawiris-gbl-backing-makes-avanti-acquisition-best-kind-of-spac?utm_campaign=twitter_automated&…2/10Avanti Acquisition isn’t just any other special purpose acquisition vehicle in a sea ofSPACs. Its sponsor, Avanti Acquisition SCSp, is an affiliate of the NNS Group, a single-family office founded by Mr. Sawiris, and Sienna Capital, the wholly-owned alternativeinvestment platform of Groupe Bruxelles Lambert, a publicly traded investment holdingcompany. On its website Avanti Acquisition refers to NNS Group and Sienna Capital asit founders.In the public markets, NNS Group is currently most notably as the largest shareholder ofOCI (OTC:OCINF) and Orascom Construction (OTCPK:ORSCY), and a significantshareholder in many other companies including Adidas AG (OTCQX:ADDYY), Arkema(OTCPK:ARKAY), Signature Aviation (OTCPK:BBAVF), Babylon Health, and Aston VillaFootball Club. In December Sawiris’ love of New York officially expanded beyond largeamounts of real estate, buying a stake in Madison Square Garden Sports (MSGS), thatowns NBA side New York Knicks and the New York Rangers who compete in the NHL.Nassef Sawiris’ personal net worth is currently around $5 billion according to Forbes,and the Sawiris family is among the richest in Africa and the world. Father Onsi Sawirisfounded Orascom Construction in 1950. Gamal Abdel Nasser nationalized it ten yearslater, but Onsi rebuilt Orascom and transferred control to his son Nassef in 1995.1/27/2021Nassef Sawiris, GBL Backing Makes Avanti Acquisition The Best Kind Of SPAC (Pending:AVAN) | Seeking Alphahttps://seekingalpha.com/article/4401319-nassef-sawiris-gbl-backing-makes-avanti-acquisition-best-kind-of-spac?utm_campaign=twitter_automated&…3/10Never heard of GBL? Although it boasts a portfolio valued at $23 billion, the companyremains relatively unknown. GBL is one of those holding companies through whichwealthy families hold majority shares in a number of corporations, playing a key role ininfluencing these companies’ corporate strategies and decisions.These holding companies often operate by stockpiling companies located in Belgium,Switzerland, Luxembourg and the Netherlands, which has the dual benefit of reducingtheir tax bill and enabling them to increase their investment capacity by making thecapital of these companies available to minority shareholders while they retain control.This is exactly what GBL did. By putting a chunk of their assets in GBL, Albert Frère andhis family found themselves sitting, with the Desmarais family, on a 19 billion europortfolio.Prominent investors, buyout shops, politicians and celebrities have joined the SPACgame last year, resulting in bigger IPOs and acquisitions, while billionaire investor BillAckman scored the biggest ever SPAC listing in July with a $4 billion offering ofPershing Square Tontine Holdings (PSTH).Firmly established in the U.S., SPACs have now been gaining traction with companiesand investors in Europe, and the booming club of SPAC just recruited a new, prominentmember. Sergio Ermotti, the outgoing chief executive officer of UBS Group AG (UBS)1/27/2021Nassef Sawiris, GBL Backing Makes Avanti Acquisition The Best Kind Of SPAC (Pending:AVAN) | Seeking Alphahttps://seekingalpha.com/article/4401319-nassef-sawiris-gbl-backing-makes-avanti-acquisition-best-kind-of-spac?utm_campaign=twitter_automated&…4/10has agreed to serve as chairman of Investindustrial Acquisition Corp (IIAC) after theSPAC raised $350 million.One private company certainly near the top of the list of several European-focusedSPACs is Klarna. Klarna is a major payments company from Sweden, and currently oneof Europe’s most valuable fintech companies. In fact Klarna co-founder and CEOSebastian Siemiatkowski (SS) has made clear that they are seriously considering takingthe company public at some point in the not too distant future.Founded in 2005, Klarna is now one of Europe’s biggest fintech companies. It’s apayment solution that offers a variety of payment methods, but the most used method isone that allows customers to pay for online purchases after receiving them.During the period 2006-2008, it launched its payments service in Norway, Finland, andDenmark. In 2010, the company entered Germany and the Netherlands. During thattime, Sequoia Capital also decided to invest in Klarna.Talking about the future, I saw that you talked to the Financial Times, and whenthey asked you about going public after all these years, you said that, “In manyways we have most of the things in place that we need. It’s more a question oftiming and focus.” So how is 2020 looking in terms of timing?SS: Yeah, I don’t know, maybe it could happen. It was kind of funny, because I wasreading an interview with Michael Moritz, who’s on our board, and he was saying thatwe were going to stay private forever. So, I don’t know, it’s hard for me to knowwhat’s true anymore. People are reporting different things about Klarna.You never do know what Michael Moritz is going to say. But if you were to gopublic, I assume it would be a U.S. listing.SS: I would assume so, too.Of course, every time you raise money it impacts whether or not you’reprofitable. Are you profitable now? Have you ever been?SS: Klarna has been profitable every year up until this year.1/27/2021Nassef Sawiris, GBL Backing Makes Avanti Acquisition The Best Kind Of SPAC (Pending:AVAN) | Seeking Alphahttps://seekingalpha.com/article/4401319-nassef-sawiris-gbl-backing-makes-avanti-acquisition-best-kind-of-spac?utm_campaign=twitter_automated&…5/10In 2012, the company launched its product Klarna Checkout. Instead of being one of thepayment options, it can now manage the whole checkout experience. During that time,the fintech company also expanded to Austria. In 2014, it acquired German paymentprovider Sofort and became Klarna Group. Three years later in 2017, its banking licensegot approved and it became Klarna Bank AB. This is also the year it launched its veryown payment app and acquired German company Bilpay.In 2019, the Swedish unicorn raised $460 million and it had a post-money valuation of$5.5 billion. This made it the highest-valued private fintech company in Europe.Currently, the company has over 85 million consumers and more than 200,000 retailpartners. It continues to grow fast, with over 3,000 employees across 17 countries.Klarna has also begun competing more aggressively in the U.S. – as well as fending offa growing spate of competitors, from publicly traded Afterpay (OTCPK:AFTPF) to MaxLevchin’s Affirm (AFRM).There is a competitor of yours, AfterPay, that was criticized last year becausesomething like a quarter of its revenue was coming from late payments. Where1/27/2021Nassef Sawiris, GBL Backing Makes Avanti Acquisition The Best Kind Of SPAC (Pending:AVAN) | Seeking Alphahttps://seekingalpha.com/article/4401319-nassef-sawiris-gbl-backing-makes-avanti-acquisition-best-kind-of-spac?utm_campaign=twitter_automated&…6/10If Klarna at some point will seriously consider going public through a merger with one ofthe larger U.S.-listed SPACs, perhaps directed by a management team that hasconnections and stated that attention is on a European business that can be universallyaccessible to the U.S. market, remains to be seen, but certainly for many SPACs a fast-growing fintech quickly start to look like a good fit.However, that doesn’t mean there are no risks with taking this route. While raisingcapital for a SPAC may seem like smooth sailing in today’s market environment,sponsors may face rough seas when they try to get their new shareholders to approvethe deals they strike.Each SPAC generally has a 24-month window to complete a deal to buy a company,which must be approved by a vote of the SPAC shareholders, or else the entity must[is your revenue coming from]?SS: Most of it is coming from merchant fees, and late fees in general are neverbigger than the losses that you’re making. But I think it’s definitely an important topic,where all the companies in this industry need to be very careful about how you set upyour products.You’re adding this hub in Berlin, but you’re already in Germany-SS: Yes, Germany is actually our largest market. In Germany, we have about 30million users, which, you know, takes us about 10 million ahead of that Americanwallet thing [PayPal], which is quite cool. So Germany is super important for us, butright now what’s exciting is the U.S., so right now we’re adding customers at a pacethat will be about six million customers on an annual basis right now. So the U.S. isreally taking off.We are in a very exciting phase right now, where the U.S. and U.K. is growing so fastfor us. . . And we want to continue investing. We think the potential market in in theU.S. is just massive . . . So we’ll see what happens, but I wouldn’t rule it out, that onething that could happen is raise even more money to be investing even more ingrowth and product delivery, and new products and services, as well as sales andmarketing in the U.S.1/27/2021Nassef Sawiris, GBL Backing Makes Avanti Acquisition The Best Kind Of SPAC (Pending:AVAN) | Seeking Alphahttps://seekingalpha.com/article/4401319-nassef-sawiris-gbl-backing-makes-avanti-acquisition-best-kind-of-spac?utm_campaign=twitter_automated&…7/10Advertisementliquidate and return its capital to investors. The turnover in the shareholder base thatoccurs once a deal is announced, coupled with the arduous task of getting retailshareholders to vote and the details of the voting process, means that not all of thesedeals will get approved.What some SPAC sponsors may not realize is that many institutional holders have apolicy of following the advice of ISS or Glass Lewis, who have been known torecommend against approval of a SPAC acquisition. A well-planned proxy solicitationeffort, including outreach to investors, and the right backers will help taking this issueinto account.Given the vast amount of SPAC capital chasing a finite number of acquisition targets,and the relatively short window in which to make an acquisition, we are likely to see anumber of SPAC sponsors trying to do deals at inflated valuations in today’s market.Investors should remain mindful of this, and retail investors especially would do well tolimit downside risk by acquiring favored SPACs based on criteria such as proven trackrecords of key management as well as founders, above-average SPAC size (with $335million the average SPAC size during 2020), and by purchasing at a price that takesrisk/reward and IPO ‘base’ price into sufficient account.In some sense, SPACs are a return to a normal we’ve seen before in financial markets.The traditional IPO process isn’t less desirable because it’s too expensive, but becauseit takes so long. And SPACs are a faster alternative. Finance tends to find ways to workaround restrictions.Take risk tolerance. Regulators have flexibility in determining the form of risk tolerance.But they ultimately can’t change its existence that much. Some market participantscrave volatility, and they’ll find it one way or another. Similarly, regulators can make theIPO process slower. But some companies have a preference for speed for multiplereasons including favorable market environment, and will always have very specific orurgent needs that can’t be satisfied in time by the usual way of going public.Disclosure:I am/we are long AVAN.I wrote this article myself, and it expresses my own opinions. I am notreceiving compensation for it (other than from Seeking Alpha). I have no business relationship with any companywhose stock is mentioned in this article.

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