23andMe has revealed plans to go public via a special purpose acquisition company (SPAC) merger with VG Acquisition (NYSE:VGAC) and shares of VGAC stock are soaring on Thursday.
Here’s everything investors need to know ahead of 23andMe’s SPAC merger with Virgin Group.
- 23andMe is a consumer genetics and research company founded in 2006.
- It offers genetic testing to customers and uses that information to provide them with details about their health and wellness.
- The company also makes use of this information when developing treatments for genetic diseases.
- VG Acquisition is a blank check company created by Virgin Group with the goal of taking another company public.
- The 23andMe SPAC merger with VG Acquisition will have the combined company trading on the New York Stock Exchange.
- This will have shares of VGAC stock switching to the ME stock ticker once the deal closes.
- The SPAC merger also values 23andMe at $3.5 billion.
- It will provide the company with $759 million of gross proceeds.
- That includes $509 million in cash held by VG Acquisition and $250 million from a private investment in public equity (PIPE).
- Virgin Group founder and CEO Sir Richard Branson and 23andMe co-founder and CEO Anne Wojcicki are both planning to contribute $25 million to the PIPE.
- In total, 23andMe should come out of this SPAC merger with $984 million in cash to fund its operations.
- 23andMe’s current shareholders will continue to be the majority after the merger with an 81% stake in the company.
- The SPAC merger already has unanimous support from both companies’ Boards of Directors.
- It now needs approval from shareholders of VGAC stock and regulators.
- The current estimate is for the deal to close during the second quarter of 2021.
VGAC stock was up 15.1% as of Thursday morning.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.