Consumer genetic testing company 23andMe is making a move to the public market via the recently re-popularized SPAC process. A SPAC, or Special Purpose Acquisition Corporation, is set up as a so called blank check company and goes public without the roadshows that typically go along with a traditional initial public offering (IPO).
In 23andMe's case, the company will merge with VG Acquisition Corp., a SPAC sponsored by Richard Branson's Virgin Group, in the second quarter of 2021. The combined company will list on the New York Stock Exchange (NYSE) under the ticker symbol ME.
23andMe sells DNA testing kits to consumers that claim to provide insight into a person's genetic traits, including indicators of health predispositions and ancestry. DNA samples are collected by the customer via saliva swabs and sent back to 23andMe, where they are processed in labs based in the United States.
Last January, 23andMe slashed 14% of its overall workforce and shifted focus to its direct-to-consumer business. While the company had emerged as an early leader at the onset of the DNA testing kit boom, its sales took a hit amid increasing concerns over privacy.
Also: Before taking that DNA test: Six things you need to know
Nonetheless, 23andME and VG Acquisition Corp. are expected to have a combined enterprise value of approximately $3.5 billion, with CEO Anne Wojcicki and Branson each investing $25 million into a $250 million private investment in public equity offering. Additional investors include Fidelity Management, Altimeter Capital, Casdin Capital and Foresite Capital.
"As a fellow industry disruptor as well as early investor in 23andMe, we are thrilled to partner with Sir Richard Branson and VG Acquisition Corp. as we approach the next phase of our business, which will create new opportunities to revolutionize personalized healthcare and medicine," said Wojcicki, in prepared remarks. "We have always believed that healthcare needs to be driven by the consumer, and we have a huge opportunity to help personalize the entire experience at scale, allowing individuals to be more proactive about their health and wellness. Through a genetics-based approach, we fundamentally believe we can transform the continuum of healthcare."