Wednesday, February 28, 2024
Today, Capital A Berhad (“Capital A”), traded on the Kuala Lumpur Stock Exchange as 5099.KL, has officially sealed a business combination pact with Aetherium Acquisition Corp (Nasdaq: GMFI), a Special Purpose Acquisition Company (“SPAC”), to introduce Capital A International (“CAPI”) to the U.S. public markets. CAPI is poised to harness the expansion, management, and licensing of the AirAsia brand, acting as a dynamic catalyst for promoting Asean brands globally. This venture not only provides investors with an entry point into a rapidly growing economic center but also positions it on course to potentially become the world’s fourth-largest economy by 2030.
Heading CAPI will be Tony Fernandes, a widely recognized entrepreneur in Asia, celebrated for his acquisition of AirAsia in 2001 and its transformation into a global airline that revolutionized air travel across the region. Under his leadership, the airline has experienced remarkable growth, expanding its fleet from just two planes to a current tally of 242 aircraft. This growth has propelled AirAsia to become Asia’s largest low-cost carrier and one of the top three most robust airline brands worldwide. With operations spanning across Asean countries and hubs in Malaysia, Thailand, Indonesia, the Philippines, and soon Cambodia, AirAsia services 278 routes connecting 131 destinations globally, having served over 776 million passengers since its inception.
Tony Fernandes, Chief Executive Officer of Capital A said, “Over more than two decades, AirAsia has become a prestigious brand synonymous with value, innovation and inclusivity.
AirAsia has transformed from a small Malaysian airline into a leading global aviation and travel brand valued at over $1 billion*, and enabled Capital A to build a diversified portfolio spanning aviation, aviation services, logistics, and digital companies in fintech, travel and hospitality. The evolution of the AirAsia brand has created a loyal global consumer base, positioning us favorably to expand our brand internationally through CAPI. This listing grants us access to the world’s most extensive and liquid capital markets, enhancing the company’s international credibility and presence while creating value for our shareholders.”
Apart from the AirAsia brand, CAPI possesses intellectual property rights for 14 other well-known brands and over 224 trademarks across 23 countries. CAPI’s platform seamlessly integrates brand strategy, creative marketing, and intellectual property development to strategically position its brands and foster cultural resonance among consumers. The company aims to capitalize on the brand equity of AirAsia through expanded licensing initiatives while employing its proven strategy to advance and accelerate the expansion of its intellectual property portfolio.
Mr. Fernandes remarked, “We are the first Asean-based brand in the travel sector to adopt this strategy and expand through licensing, leveraging our strong ties to the Asean region.
Moreover, our growth strategy encompasses the acquisition and development of additional brands from this vibrant region. We are confident in the potential of our brand business to extend far beyond our initial footprint, especially in markets where intellectual property and brand value are highly regarded by consumers and investors.
The Asean region offers a thriving economic landscape with a 680 million population, surpassing the U.S. and closely trailing the European Union. Fueled by a growing middle-income population that is creating new consumer markets and economic opportunities, the region is poised for sustained growth. Moreover, the recent surge in popularity of Asia-based media, entertainment, and lifestyle brands underscores the escalating global demand for brands originating in Asia.”
Jonathan Chan, Chairman and CEO of Aetherium said, “We’re thrilled to partner with Tony and the CAPI team to capitalize on their proven track record and extend the brand beyond the world’s fastest-growing consumer-driven market, boasting a population twice the size of the United States. Under Tony’s exceptional leadership, AirAsia has evolved into an immensely successful and widely recognized brand in the region. With over 22 years of innovation in air travel and digital services, the company is strategically positioned to strengthen its leadership in Asean and pursue growth in international markets. This collaboration presents a distinctive opportunity for U.S. capital market investors to participate in the rapid expansion of Asean economies through a company that embodies the region’s diverse culture, energy, and emerging opportunities.”
Investment Highlights
As the owner and licensor of the esteemed AirAsia brand, renowned in airline, travel, and lifestyle sectors, CAPI leverages the growth resurgence of Asia’s largest low-cost carrier, supported by a robust order book.
Operating on an asset-light model, the business generates robust operating margins with minimal inventory and working capital requirements, bolstered by stable and recurring revenue streams from royalty fees, driving free cash flow.
The company benefits from access to Capital A’s ecosystem, boasting over 50 million users, 22 million loyalty members, and over 56 million social media followers, expanding brand reach and enhancing CAPI’s brand-building capabilities.
Headquartered in Asean, one of the world’s fastest-growing economies set to become the fourth-largest by 2030, the company boasts a substantial addressable licensing global market of $341 billion, with the Asean market accounting for $5 billion, growing at an impressive 13% annually, surpassing the global average.
Numerous opportunities exist to develop the brand platform:
Expand the AirAsia brand beyond the travel sector by venturing into new industries, categories, and geographies through in-house ventures or joint ventures;
Create new brands that leverage the robustness of the Asean markets.
Create character intellectual property and enhance value through partnerships and merchandising; and
Acquire and grow other Asean-based brands
The company is led by an experienced management team with a successful track record in brand management.
Editor’s Note: Asean (Association of Southeast Asian Nations) is a political and economic union comprising Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.
Key Transaction Terms
Under the terms of the proposed transaction, CAPI will merge with Aetherium and become a publicly traded entity. The transaction reflects an estimated pro forma enterprise value for CAPI of $1.15 billion. Although the Boards of both CAPI and Aetherium have unanimously approved the transaction, it remains subject to the approval of Aetherium stockholders and other customary closing conditions.
Advisors
Greenberg Traurig, LLP serves as U.S. legal counsel, and Foong & Partners serves as Malaysian legal counsel to CAPI. Rimon P.C. is serving as United States legal counsel to Aetherium.
Tags: airasia, Capital A, Jonathan Chan, Tony Fernandes
Wednesday, May 1, 2024
Wednesday, May 1, 2024
