23andMe Finds its Path in a SPAC
Posted on 02/10/2021
23andMe, Inc., headquartered in Sunnyvale, CA, is a consumer genetics and research company. Founded in 2006, 23andMe has pioneered direct access to genetic information as the only company with multiple FDA clearances for genetic health reports. VG Acquisition Corp. (VGAC), a special purpose acquisition company (SPAC) sponsored by Virgin Group, agreed to merge with 23andMe. Upon completion of the transaction, VGAC will change its name to 23andMe Holding Co. and the combined company’s securities will trade on the New York Stock Exchange (NYSE) under the ticker symbol “ME.”
The combination values 23andMe at an enterprise value of approximately US$ 3.5 billion. The shareholders of 23andMe will own approximately 81% of the combined company, and the transaction is expected to deliver up to US$ 759 million of gross proceeds through the contribution of up to US$ 509 million of cash held in VGAC’s trust account and a concurrent US$ 250 million private placement (PIPE) of common stock. Anne Wojcicki, CEO and co-founder of 23andMe, and Richard Branson, founder of the Virgin Group, are each investing US$ 25 million in the PIPE and are joined by institutional investors, including Fidelity Management & Research Co. LLC, Altimeter Capital, Casdin Capital, and Foresite Capital.
Richard Branson invested in the Series A round in 23andMe.
23andMe had US$ 441 million in revenue for 2019 and US$ 305 million in revenue for 2020. 23andMe had a loss of US$ 189 million in operating income for 2019 and a loss of US$ 258 million in operating income for 2020.
Advisors
Citi is serving as lead financial advisor, capital markets advisor, and placement agent to 23andMe. Morgan, Lewis & Bockius LLP is serving as legal counsel to 23andMe.
Credit Suisse acted as lead financial advisor, capital markets advisor and placement agent to VG Acquisition Corp. LionTree Advisors acted as financial advisor and Davis Polk & Wardwell LLP is serving as legal counsel to VG Acquisition Corp.
