Wound care company Sanuwave Health announced that it entered into a business combination agreement with SEP Acquisition Corp.
The merger with SEP, a special purpose acquisition company (SPAC), aims to create a Nasdaq-listed company. Upon the transaction’s completion, the combined company expects to operate under the Sanuwave name and the “SNWV” ticker. The proposed transaction values Sanuwave at $127.5 million.
According to a news release, Sanuwave expects its investors to have an approximately 69.6% equity ownership. This assumes the combined company received approximately $13 million in gross proceeds at closing. It includes $12 million from non-redeeming holders of SEPA’s Class A common stock and other PIPE investors, plus $1 million from the SPAC sponsor.
Approximately $8.5 million in capital has already been committed, including $7 million in shares of SEPA’s Class A stock.
“SEPA is a strong, value-add partner, and this transaction will allow Sanuwave to simplify its capital structure and gain a listing on the Nasdaq Capital Market while funding the company for the exciting growth ahead,” said Sanuwave CEO Morgan Frank. “This is the next step in putting the company on sound footing that will allow us to focus on rapid, profitable growth and to garner an equity valuation commensurate with our performance.”
Sanuwave offers two FDA-approved products, including its lead UltraMIST product, which constitutes more than 90% of its revenue. The low-frequency, non-contact ultrasound system delivers energy through a fluid mist to promote wound healing below the surface.
UltraMIST never touches the wound in a pain-free way that modulates cell membranes to drive increased blood flow. It also increases capillary formation and enhances macrophage mediate VEGF and PDGF release. This enhances the removal of damaged tissues by neutrophils. UltraMIST also reduces pro-inflammatory cytokines and kills bacteria and biofilms by lysing cell walls.
