LumiraDx Ltd., a diagnostic company that provides Covid-19 tests, is announced by a reverse merger with a blankcheck company.
The British firm will work with CA Health care Acquisition Corp. in an agreement that values LumiraDx’s equity at $ 5 billion, the companies said in a statement.
Although no share placement was linked to the transaction, LumiraDx acquired a $ 300 million loan BioPharma Credit Plc and an additional $ 100 million revolving credit facility from Capital One Financial Corp., according to the statement.
At $ 5 billion, the LumiraDx transaction is the largest of the past year by a healthcare company with a specialty procurement company, or SPAC, according to data compiled by Bloomberg.
Covid-19 test
LumiraDx’s machines, about the size of a brick, are designed to process about 30 different tests, including Covid-19, within 12 minutes. The company is also developing a smaller device that will be available for home use.
The company has offices for research and development and support in Waltham, Massachusetts, and in San Diego. In January, it submitted an initial public offering to the U.S. Securities and Exchange Commission.
LumiraDx estimates it will have revenue of $ 600 million to $ 1 billion this year, compared to $ 139 million in 2020, according to the statement. Its customers include CVS Health Corp., the UK National Health Service and the Bill & Melinda Gates Foundation.
According to CEO Ron Zwanziger, the global coronavirus pandemic has accelerated the deployment of LumiraDx’s machines in a way that has surpassed.
“There would be a significant long-term benefit for us if we had so many earlier units in the field than would have happened without the pandemic,” he said in an interview.
Broader focus
While LumiraDx is expected to see significant growth in demand for its Covid-19 tests as the pandemic continues, supply is secondary to the company’s broader focus on bringing careful testing to patients, Zwanziger said.
“Fundamentally, we are about the transformation of community-based care,” he said.
While the SPAC madness has cooled in recent weeks, CA Health care Larry Neiterman, chairman of the acquisition, said this agreement should still be well received.
“The market has slowed down a bit, but I think the market will still be excited about it,” Neiterman, a former chief operating officer of Deloitte, said in an interview. ‘We think it’s about reasonable valuation and we bird good about our valuation. ”
Evercore Inc. and Raymond James Financial Inc. were financial advisers to LumiraDx, while BTIG advised CA Health care Acquisition.
CA Health care Purchase raised $ 115 million in its January IPO. Its shares closed at $ 9.70 every Tuesday.
(Updates compared to other transactions in fourth paragraph)