Hypebeast to List Shares in U.S. Through SPAC Merger
Tom Brady, Naomi Osaka, Tony Hawk and Jonah Hill are among the deal’s investors
Hypebeast Ltd. 150 +39.51% is bringing its stock to the U.S. through a merger with a special-purpose acquisition company that will value the lifestyle and culture company at more than $530 million after the investment, according to people familiar with the matter.
Part lifestyle website, part e-commerce company, Hypebeast will merge with Iron Spark I Inc., and the deal will include a $13.3 million private investment in public equity from celebrities that include football player Tom Brady, tennis star Naomi Osaka, professional skateboarder Tony Hawk and actor Jonah Hill, among others.
After the merger, the stock will be dual-listed on the Hong Kong stock exchange and Nasdaq Inc. Hypebeast, which started as a sneaker blog by now-Chief Executive Kevin Ma in 2005, has been listed in Hong Kong since 2016.
The deal comes during a lull in the SPAC market. Starting in mid-2020, blank-check companies surged in popularity. At times in 2021, more new listings happened through shell companies than traditional initial public offerings of stock. Over the past year, however, their popularity receded as regulators took a harder look at whether SPACs skirt investor protections. Last week, the Securities and Exchange Commission advanced rules that could make it harder for SPACs to raise money from investors and execute mergers.
So far this year, the value of SPAC mergers has exceeded $35 billion, compared with nearly $231 billion at this point last year, according to Dealogic.
SPACs tend to be popular alternatives to traditional IPOs in part because they allow early-stage companies to make projections about their growth and financials that aren’t allowed in traditional offerings.
Hypebeast differs from many companies going public via SPACs in that it is already profitable. For the six months ended in September, Hypebeast posted a net profit of roughly $8 million, according to a regulatory filing.