Nov 7 (Reuters) - Dubai's AIR, the owner of hookah brand Al Fakher, said on Friday it had agreed to go public in the U.S. through a merger with blank-check firm Cantor Equity Partners III CAEP.O, in a deal valuing the combined company at $1.75 billion.
The special purpose acquisition deal comes as this unconventional route to the public markets has regained popularity in the United States after years of subdued activity, following poor share performance and regulatory roadblocks.
A SPAC is a shell firm that raises money through an IPO to merge with a private business and take it public, offering companies an alternative route to the market bypassing the longer and costlier traditional IPO process.
Dubai-based AIR said it generated $375 million in revenue and $150 million in adjusted earnings before interest, taxes, depreciation, and amortization for its core products in 2024.
It has eight production facilities across the United Arab Emirates, the European Union and third-party partners, supporting more than 90 markets globally with established distribution networks, the company said.
Al Fakher, its most valuable business, makes flavored hookah and had 14 million consumers worldwide as of 2024.
Hookah use has grown in the U.S. in recent years as lounges and cafes offering flavored smoking become more common, frequented by younger consumers in urban areas.
While the product is often marketed as a social or cultural activity, U.S. health agencies continue to warn that hookah smoke contains many of the same harmful chemicals found in cigarettes.
American financial services firm Cantor Fitzgerald is the backer of the SPAC taking AIR public.
A total of 116 SPACs have completed initial public offerings so far this year, according to SPAC Research, compared with 57 in 2024.
The companies expect the deal to close in the first half of 2026, after which the combined entity, AIR Global Limited, will trade on the Nasdaq under the "AIIR" ticker symbol.
(Reporting by Manya Saini in Bengaluru; Editing by Pooja Desai)
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