CA Healthcare Acquisition Corp.— a special purpose acquisition company — announced today that it entered a merger agreement with LumiraDx that will take the company public.
London-based LumiraDx, a point-of-care diagnostics developer, will merge with CAHC with the combination reflecting a value of $5 billion for Lumira’s existing equity, according to a news release.
Since its founding, LumiraDx has raised $700 million in equity capital, including investments from Morningside Ventures, U.S. Boston Capital Corporation, The Bill & Melinda Gates Foundation, Petrichor Healthcare Capital Management and others.
Among LumiraDx’s point-of-care diagnostic offerings is its high-sensitivity COVID-19 antigen test, which has been used by the NHS in the U.K. and has FDA emergency use authorization in the U.S. It also offers POC tests for COVID-19 antibodies, INR and D-Dimer, all of which are available in Europe.
Special purpose acquisition companies (SPACs) have become a hot investment mechanism in medtech and other industries as the U.S. emerges from the COVID-19 pandemic and resulting recession. Former Medtronic CEO Omar Ishrak, former Verb Surgical and Volcano Corp. CEO Scott Huenneken, and former iRhythm COO Karim Karti — among others — are each chairing their own SPACs as they look for attractive acquisition targets to take public.
Under the terms of the transaction, all current LumiraDx shareholders will retain the entirety of their existing holdings in the combined company, with additional capital from the CACH’s cash held in trust. Together with the new financing commitments and cash from operations, the cash will support increasing production, continued R&D activities and commercial and manufacturing expansion.
CEO Ron Zwanziger and other co-founders of LumiraDx will lead the company, while its existing board and governance principles will not change. Once the transaction closes, LumiraDx and its common shares are expected to trade on Nasdaq under the LMDX ticker.
The companies expect the transaction to close in the late stages of the second quarter or early part of the third quarter this year, subject to approval from security holders and customary closing conditions. Both companies’ boards approved the merger.
“LumiraDx is at the tipping point of driving a transformation in diagnostic testing. This new public recognition will solidify our already growing presence in the point of care testing market,” Zwanziger said in the release.
“COVID-19 has demonstrated how important it is to have rapid and highly accurate diagnostic tests, at mass scale, and available everywhere. It has validated the performance of ourpPlatform and enabled us to partner with governments, health systems, retail chains and other customers to expand testing across community care settings both in high and low-and middle-income countries. This access to increased testing will change the way care pathways are currently practiced, improving patient outcomes and saving human lives.”
CAHC’s chair and CEO is Larry Neiterman, a former Deloitte chief operations officer. He said that LumiraDx’s next-generation point of care solutions provide a significant opportunity.
“LumiraDx has a clear strategy for addressing the large and underpenetrated testing market to increase next-generation POC market share. In the near-term, demand for fast, low-cost COVID-19 tests is driving strong and transformational growth for LumiraDx’s solutions,” Neiterman said.