A new “blank check” company in Bethesda that aims to invest in health care technology companies has closed its initial public offering and began trading on the Nasdaq exchange, the latest in a string of such companies to make their debut this year.
Proceeds from the offering by Healthcare Services Acquisition Corp., trading under the ticker symbol "HCARU" since Wednesday, totaled $331.2 million, with more than 33.1 million units sold at $10 per share. Each unit included one share of Class A common stock in the firm, as well as a redeemable warrant for half of another share. Each whole warrant will allow the holder to purchase a Class A share at $11.50 per share.
The special purpose acquisition company, or SPAC, is led by Chairman and CEO David Blair, a partner in Monumental Sports and Entertainment and former chairman and CEO of Catalyst Health Solutions. Other executives of the new entity include President Martin Payne, a former executive at Catalyst and UnitedHealth Group; CFO Joshua Lynn, former managing director at Caspian Capital; and COO Tao Tan, former associate partner at McKinsey & Co.
Blank-check companies, or SPACs, raise money through an initial public offering without any products or services, and then use the cash to acquire or merge with another company or companies, taking them public without a traditional IPO.
As projected by an October prospectus, funds managed by BlackRock served as an anchor investor in the new company’s IPO, purchasing 2.45 million units for a total $24.5 million. AllianceBernstein served as a strategic partner, which it said is a first for the company in the SPAC space.
The new company’s directors include:
- Michael Donovan, co-founder and former CEO of Gateway Health Partners, which sold in 2017, and current board member at Accountable Health Solutions and Ontario Ventures
- Brian Griffin, CEO of Advanced Dermatology and Cosmetic Surgery and former chairman and CEO of Diplomat Pharmacy before its acquisition by OptumRx
- Jeanne Manischewitz, a financial services and investment industry professional who most recently served as portfolio manager and partner at York Capital Management.
In terms of potential acquisitions, Healthcare Services Acquisition is targeting companies working in “medical, dental, pharmaceutical and behavioral health services, with an emphasis across the full value chain including benefit management, health care information technology, supply chain or business support services and cost containment solutions,” according to a filing Wednesday with the Securities and Exchange Commission.
The goal is to acquire “one or more” smaller, local players in the health care space that are “trapped” at their smaller size due to larger, national companies’ inability or unwillingness to consolidate them, according to the filing.
“We … look forward to bringing to the market a company that effectively tackles our nation's increasingly complex health care challenges, particularly around disparities in access and outcomes, while delivering exceptional returns for our shareholders," Blair said in a statement. "In an industry that thrives on scale, a SPAC enables us to 'start at scale' and chart a path to transformative growth by combining the power of public markets with our extensive relationships and value creation playbook."
B. Riley Securities, a subsidiary of B. Riley Financial Inc., serves as book-running manager. Ropes & Gray LLP serves as issuer’s counsel and Ellenoff Grossman & Schole LLP is underwriters’ counsel. WithumSmith+Brown PC serves as auditor and Continental Stock Transfer & Trust Company LLC is trustee.
The new company’s stock closed at $10.24 per share Monday, near its $10.27 closing price on its debut Wednesday.
Its arrival follows that of other similar SPACs during a local surge in the latter half of 2020, mirroring a national trend. Silver Spring documentary streaming service CuriosityStream in October merged with a SPAC to go public, followed by SOC Telemed, which merged with a SPAC, Healthcare Merger Corp., to go public in early November. Two others also joined the public markets, from Revolution LLC CEO Steve Case and serial entrepreneur and investor Mark Ein,
