LumiraDx Ltd., a diagnostics company that produces Covid-19 tests, goes public through a reverse merger with a blank check company.
The UK-based company will combine with WHICH healthcare Acquisition Corp. in a deal that values LumiraDx’s equity at $ 5 billion, the companies said in a statement.
While there is no equity placement associated with the transaction, LumiraDx has obtained a $ 300 million loan from BioPharma Credit Plc and an additional $ 100 million asset-based revolving credit facility Capital One Financial Corp., according to the statement.
At $ 5 billion, LumiraDx’s deal is last year’s largest by any healthcare company with a specialty acquisition company, or SPAC, according to data collected by Bloomberg.
Covid-19 test
About the size of a stone, LumiraDx’s machines are designed to process about 30 different tests, including for 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 and development and support offices in Waltham, Massachusetts, and in San Diego. In January, it filed for an IPO with the US Securities and Exchange Commission.
LumiraDx estimates it will have sales of $ 600 million to $ 1 billion this year, compared to $ 139 million in 2020, the statement said. Belong to his customers CVS Health Corp., the UK National Health Service and the Bill & Melinda Gates Foundation.
Since its inception, LumiraDx has raised $ 700 million from backers, including Morningside Ventures, US Boston Capital Corp. and Petrichor Healthcare Capital Management, as well as from the Gates Foundation and other investors, the statement.
The global coronavirus pandemic has accelerated the deployment of LumiraDx machines in a way that exceeded the company’s expectations, said CEO Ron Zwanziger.
“There will be a significant long-term benefit to us if we have so many more units in the field much earlier than it would have been without the pandemic,” he said in an interview.
Broader focus
While LumiraDx expects demand for its Covid-19 tests to increase significantly as the pandemic continues, the offering is secondary to the company’s broader focus on bringing point-of-care testing to patients, Zwanziger said.
“We are essentially transforming community care,” he said.
While the SPAC frenzy has cooled in recent weeks, CA healthcare Takeover Chairman Larry Neiterman said this deal should still be well received.
“The market is a bit subdued, but I think the market will still be excited about it,” said Neiterman, a former Deloitte Chief Operations Officer, in an interview. “We think it’s all about a reasonable valuation and we do to feel good about our appreciation. “
Evercore Inc. and Raymond James Financial Inc. were financial advisors to LumiraDx BTIG advised CA healthcare Takeover.
WHICH healthcare The acquisition grossed $ 115 million when it went public in January. Shares closed at $ 9.70 every Tuesday. Shares of the new company are expected to trade on Nasdaq under the symbol LMDX.
Updates with eighth paragraph explanation