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Carlyle-backed Packable agrees US$1.55 billion SPAC merger

Carlyle-backed Packable agrees US$1.55 billion SPAC merger

A general view of the lobby outside the Carlyle Group offices in Washington, May 3, 2012. (File photo: Reuters/Jonathan Ernst)

NEW YORK: Packable, a US e-commerce firm backed by Carlyle Group, said on Thursday (Sep 9) it has agreed to merge with Highland Transcend Partners, a special purpose acquisition company (SPAC), in a deal that values the combined company at US$1.55 billion.

The deal includes US$180 million of private investment in public equity (PIPE) financing led by Fidelity Management & Research Company, with participation from Lugard Road Capital, Luxor Capital, Park West Asset Management and Morningside.

Packable, which operates third-party retailer Pharmapacks, was valued at about US$1.1 billion when Carlyle invested US$250 million to acquire its stake in November last year.

Founded in 2010, it is one of the largest third-party retailers in the United States, selling mostly health and beauty products through large online marketplaces, including Amazon, eBay, Google, Walmart and Target. The Hauppauge, New York-based company generated US$373 million in revenue in 2020 and expects that to reach US$456 million this year.

"Packable will expand geographically, invest in founder-led brands, and add new verticals such as data science, marketing and media services,” Packable chief executive Andrew Vagenas said in an interview.

As part of the merger deal, Packable's existing shareholders will receive 71 per cent of the combined company, Highland Transcend SPAC founders and investors will own 19 per cent, while PIPE investors get the remaining 11 per cent.

SPACs are shell companies that raise money from stock market listings with the purpose of merging with a private company and taking it public. The Highland Transcend SPAC had raised US$300 million in its initial public offering in December last year, including the underwriters' option.

Highland Transcend SPAC executives Ian Friedman and Dan Nova are expected to join Packable's board of directors after the deal closes.

"Our goal is to help the company expand further internationally, add new product categories such as shelf-stable food and pet," said Friedman, who is also chief executive of venture capital firm Highland Transcend ​Partners.

Packable will be listed on the New York Stock Exchange under the ticker, symbol PKBL.

Source: Reuters/ng

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