A blank check company supported by the founder of the Virgin Group, Sir Richard Branson is taking consumer DNA testing company 23andMe public, which valued the merged company at $ 3.5 billion, the companies said Thursday.
Under the contract with VG Acquisition, 23andMe will receive proceeds of $ 759 million includes $ 250 million from a number of investors including Branson, 23, and Me co-founder Anne Wojcickiand funds managed by Fidelity Management & Research, Altimeter Capital, Casdin Capital and Foresite Capital.
The latest celebrity is billionaire Branson, a serial entrepreneur whose space tourism company Virgin Galactic signed a deal with successful blank check investor Chamath Palihapitiya in 2019 to join the blank check dealmaking frenzy.
A SPAC, or blank check, company is a shell company that raises funds through an initial public offering to acquire a private company which then goes public through the merger.
For the acquired company, the merger is an alternative option to go public via a traditional IPO. SPACs have emerged as one of the most popular investment vehicles on Wall Street over the past year.
The NBA Hall of Famer Shaquille O’Neal, high profile politicians like former US Commerce Secretary Wilbur Ross, former Republican House Speaker Paul Ryan and hedge fund chiefs Dan Loeb and Bill Ackman are also trying to do business through their SPACs.
23andMe, co-founded by Wojcicki in 2006, sells genetic testing kits directly to consumers. Over the years, 23andMe has grown in popularity with consumers, and in 2018 it caught the attention of GlaxoSmithKline, which invested $ 300 million in Silicon Valley, best known for its saliva-based test kits that give users an insight in their genetic origin.
The combined company will trade on the New York Stock Exchange under the symbol “ME”.