LumiraDx Ltd., a diagnostic company that produces Covid-19 tests, goes public through a reverse merger with a company with a blank check.
The UK company will combine with THAT Health Acquisition Corp. in a transaction that values LumiraDx’s equity at $ 5 billion, the companies said in a statement.
Although there is no equity investment attached to the transaction, LumiraDx obtained a $ 300 million loan BioPharma Credit Plc and an additional $ 100 million revolving credit facility Capital One Financial Corp., according to the statement.
At $ 5 billion, the LumiraDx transaction is the largest in the last year by a healthcare company with a special purpose procurement company or SPAC, according to data compiled by Bloomberg.
Covid-19 test
LumiraDx machines, about the size of a brick, are designed to process about 30 different tests, including the 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 San Diego. In January, it submitted an initial public offering to the US Securities and Exchange Commission.
LumiraDx estimates that it will have revenues between 600 and 1 billion dollars this year, compared to 139 million dollars in 2020, according to the statement. Among its customers is CVS Health Corp., UK National Health Service and the Bill & Melinda Gates Foundation.
Since its inception, LumiraDx has raised $ 700 million from sponsors, inclusive Morningside Ventures, USA Boston Capital Corp. and Petrichor Healthcare Capital Management, as well as from the Gates Foundation and other investors, according statement.
The global coronavirus pandemic has accelerated the deployment of LumiraDx machines in a way that has exceeded company expectations, according to CEO Ron Zwanziger.
“There will be a significant long-term benefit because we have so many units in the field much earlier than would have happened without the pandemic,” he said in an interview.
Wider focus
While LumiraDx expects to see a significant increase in demand for its Covid-19 tests as the pandemic persists, supply is secondary to the company’s broader focus on bringing tests to the point of patient care, Zwanziger said.
“Essentially, we mean transforming community care,” he said.
While the SPAC frenzy has cooled in recent weeks, CA. Health Procurement President Larry Neiterman said the deal should continue to be welcomed.
“The market has gotten a little wet, but I think the market will still be happy with that,” Neiterman, former Deloitte chief operating officer, said in an interview. “We believe that this is a reasonable assessment and we sense good about our evaluation. ”
Evercore Inc. and Raymond James Financial Inc. was a financial advisor for LumiraDx, while BTIG recommended CA Health Acquisition.
THAT Health The acquisition raised $ 115 million in the January IPO. Its shares closed at $ 9.70 every Tuesday. The shares of the new company are expected to trade on the Nasdaq under the symbol LMDX.
(Updates with statement in the eighth paragraph)