Test Maker LumiraDx to Go Public in $5 Billion SPAC Deal
(Bloomberg) - LumiraDx Ltd., a diagnostics company that makes Covid-19 tests, is going public through a reverse merger with a blank check company.
The UK-based company will partner with CA Healthcare Acquisition Corp. combine in a deal that values LumiraDx's equity at $ 5 billion, the companies said in a statement.
Although there is no stock placement associated with the transaction, LumiraDx has reportedly received a $ 300 million loan from BioPharma Credit Plc and an additional $ 100 million revolving credit facility from Capital One Financial Corp. receive.
According to Bloomberg, LumiraDx's $ 5 billion deal is the largest in the past year by a healthcare company with a special purpose vehicle (SPAC).
LumiraDx's machines, roughly the size of a brick, can 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 she filed for an IPO with the US Securities and Exchange Commission.
LumiraDx estimates it will have sales of $ 600-1 billion this year, compared to $ 139 million in 2020, the statement said. Its clients include CVS Health Corp., the National Health Service of the United Kingdom and the Bill & Melinda Gates Foundation.
Since its inception, LumiraDx has raised $ 700 million from donors such as Morningside Ventures, US-based Boston Capital Corp. and Petrichor Healthcare Capital Management, as well as the Gates Foundation and other investors.
The global coronavirus pandemic has accelerated the placement of LumiraDx machines to such an extent that the company's expectations have been exceeded, according to CEO Ron Zwanziger.
"It will bring us a significant long-term advantage if we have so many more units on site much sooner than we would have without the pandemic," he said in an interview.
While LumiraDx expects a significant increase in demand for Covid-19 tests in light of the ongoing pandemic, the supply is secondary as the company is increasingly focusing on offering patients point-of-care tests, Zwanziger said.
"Basically, we want to change outpatient care," he said.
While the SPAC frenzy has cooled off in recent weeks, Larry Neiterman, chairman of the CA Healthcare Acquisition, said this deal should still be well received.
"The market has dampened a bit, but I think the market will still be delighted," said Neiterman, a former chief operations officer at Deloitte, in an interview. "We think it's all about proper evaluation and we are comfortable with our evaluation."
Evercore Inc. and Raymond James Financial Inc. served as financial advisor to LumiraDx, while BTIG advised CA Healthcare Acquisition.
CA Healthcare Acquisition raised $ 115 million when it went public in January. The stock closed at $ 9.70 every Tuesday. The new company's shares are expected to trade on the Nasdaq under the symbol LMDX.
(Updates with statement in the eighth paragraph)
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