Lakestar SPAC to acquire HomeToGo in first German deal of its kind

(Corrects reference to FlixMobility in 12th paragraph)

BERLIN (Reuters) -A listed shell company promoted by venture capitalist Klaus Hommels plans to acquire travel portal HomeToGo in a deal that, if completed, would be the first of its kind to bring a company to the Frankfurt stock exchange.

Hommels, founder of venture fund Lakestar, floated a branded special purpose acquisition company, or SPAC, in February with the goal of enabling a tech startup to stay in Europe rather than take the well-travelled route of listing in the United States.

Lakestar SPAC I raised 275 million euros ($333 million), saying it would seek to merge with a company worth between 750 million and 4 billion euros.

“Europe needs to create its own digital sovereignty to strengthen control of its tech innovations,” Hommels said of the proposed deal on Friday.

“HomeToGo is at the cutting edge of innovation in the travel sector and has the world’s largest selection of vacation rentals. We are confident that together, we will create a globally recognised and industry-defining travel tech company, made in Europe.”

The companies, which did not give a valuation for the proposed transaction, said they had entered exclusive talks but cautioned there was no guarantee that a binding agreement can be reached.

They also said in a statement that they would seek to do a private investment in public equity, or PIPE, transaction as part of the merger.

PIPE transactions serve as capital-raising exercises prior to the acquired company coming to the stock market.

The process is less onerous than a traditional initial public offering.

HomeToGo, a search engine for vacation homes and rentals that operates websites in Europe, America and the Asia-Pacific region, stands to benefit from the reopening of travel as the COVID-19 pandemic recedes.

It operates as an aggregator, in contrast to Airbnb which directly hosts landlords on its platform.

In other travel tech funding, Germany’s long-distance travel app FlixMobility said this week it had raised $650 million in fresh funding and would invest in expanding services in Europe and the United States.

Swiss-based Lakestar, which has raised 1.2 billion euros from investors according to Crunchbase, has backed earlier venture investment rounds in both HomeToGo.

Shares in Lakestar SPAC I rose 2.5% to 10.18 euros, trading above their listing price of 10 euros.

($1 = 0.8254 euros)

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