Egypt’s first SPAC is gearing up for its first acquisition: Impact investor Catalyst Partners’ SPAC, Catalyst Partners Middle East (CPME) is looking to acquire digital lending marketplace Qardy through a share swap, the CPME said in an information memorandum (pdf). The acquisition will be executed through a full or partial share swap, whereby CPME acquires the entirety of Qardy in exchange for issuing new shares.

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What we know about Qardy: Founded in July 2022, Qardy is Egypt’s first online lending marketplace connecting financial institutions with micro, small, and medium enterprises (MSMEs) seeking funding. Qardy partners with national and commercial banks, as well as leasing, factoring, and microfinance companies, to offer tailored financial programs supporting MSMEs’ working capital and expansion needs.

The move is part of a larger investment plan: The SPAC is looking to acquire six to ten companies — including two fintech and NBFS firms — the firm’s Chairman Maged Shawky previously said.

REFRESHER- CPME made its EGX debut last month, listing 1 mn shares with a nominal value of EGP 10 per share — bringing its total issued capital to EGP 10 mn. During a meeting earlier this month, the extraordinary general assembly approved a recommendation to raise the SPAC’s capital to EGP 235 mn by offering 22.5 mn shares — valued at EGP 10 per share — according to assembly minutes (pdf). The Financial Regulatory Authority (FRA) has since approved the move as well and investors have between today and Thursday to subscribe to the capital increase.

Advisors: Matouk Bassiouny & Hennawy is legal counsel and Beltone Securities Brokerage will broker the transaction.

What’s a SPAC again? A special purpose acquisition company is a type of shell company used by investors to acquire firms. SPACs raise money from the public in an IPO and then use the proceeds to merge with or acquire an appropriate company. Check out our explainer for more on how SPACs work.

Remember: CPME became Egypt’s first SPAC after receiving the green light from the FRA in late September.

IN OTHER M&A NEWS-

Cairo Housing ups stake in United Housing: EGX-listed real estate player Cairo Housing and Development has acquired an additional 21% in United Housing increasing its stake in the company to 70.9% after the two sides carried out a share swap. Cairo Housing was looking to increase its parent company and its subsidiaries’ stake in United to up to 90% — the company and its subsidiaries held a 49.9% stake in the company pre-share swap.

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