LumiraDx Ltd., a diagnostic company that produces Covid-19 tests, will go public through a reverse merger with a blank check company.
The UK-based firm will be combined with California Health care Acquisition Corp. in a deal that values LumiraDx’s capital at $ 5 billion, the companies said in a statement.
While there is no equity placement attached to the transaction, LumiraDx has borrowed $ 300 million from BioPharma Credit Plc and an additional asset-based revolving credit facility of $ 100 million Capital One Financial Corp., according to the statement.
At $ 5 billion, the LumiraDx deal is the largest last year by a healthcare company with a Special Purpose Acquisition Company, or SPAC, according to data compiled by Bloomberg.
The LumiraDx machines, about the size of a brick, are designed to process around 30 different tests, including Covid-19, in just 12 minutes. The company is also developing a smaller device that will be available for home use.
The company has research, development, and support offices in Waltham, Massachusetts, and San Diego. In January, it filed for an initial public offering with the U.S. Securities and Exchange Commission.
LumiraDx estimates it will have revenues of $ 600 million to $ 1 billion this year, compared to $ 139 million in 2020, according to the statement. His clients include CVS Health Corp., the UK National Health Service and the Bill and Melinda Gates Foundation.
The global coronavirus pandemic has accelerated the placement of LumiraDx machines in a way that exceeded the company’s expectations, according to CEO Ron Zwanziger.
“There will be a significant long-term benefit to us from having so many more units in the field much earlier than would have happened without the pandemic,” he said in an interview.
While LumiraDx expects to see significant growth in demand for its Covid-19 tests as the pandemic persists, the supply is secondary to the company’s broader focus on bringing testing to the point of care to patients, Zwanziger said. .
“Basically what we are looking for is to transform community-based care,” he said.
While the SPAC frenzy has cooled down in recent weeks, CA Health care The president of acquisitions, Larry Neiterman, said that this agreement should still be well received.
“The market has weakened a bit, but I think the market will continue to be excited,” Neiterman, a former Deloitte chief operating officer, said in an interview. “We believe that this is a reasonable valuation and feel good about our appraisal. “
Evercore Inc. and Raymond James Financial Inc. were financial advisors to LumiraDx, while BTIG advised CA Health care Acquisition.
California Health care The acquisition raised $ 115 million in its January IPO. Its shares closed at $ 9.70 every Tuesday.
(Updates compared to other offers in the fourth paragraph)