Specialists On Call (dba SOC Telemed), a telemedicine technology provider, agreed to be acquired and taken public by Healthcare Merger Corporation, a special purpose acquisition company.
The transaction implies an initial enterprise value for SOC of approximately $720 million.
HCMC currently holds approximately $250 million in its trust account, and private institutional investors, including funds and accounts managed by BlackRock, ClearBridge Investments, and Baron Capital Group, among others, have committed a $165 million in common stock for the combined company that will close concurrently with the business combination.
The combined company will operate as SOC Telemed and will trade on the Nasdaq stock market.
“SOC fits perfectly with HCMC’s differentiated expertise in the healthcare industry, and we look forward to working together to drive growth in the public markets with increased capital and the benefit of HCMC’s relationships and experience,” said Charlie Ditkoff, President of HCMC.
The acquisition proceeds will pay down existing debt, purchase a portion of the equity owned by existing SOC shareholders, and capitalize the SOC Telemed balance sheet, according to the news release.
Advisors for the transaction include Credit Suisse served as financial advisor to SOC and acted as placement agent on the private offering. Orrick Herrington & Sutcliffe served as legal counsel to SOC. MTS Health Partners served as financial advisor and Weil, Gotshal & Manges, and Ellenoff Grossman & Schole served as legal counsel to HCMC. Cantor Fitzgerald served as a capital markets advisor to HCMC.
“This business combination strengthens SOC Telemed and will allow it to further penetrate the broad and fast-growing acute telemedicine market,” said Paul Ricci, Interim CEO of SOC Telemed.
Paul Ricci added, “Telemedicine is at a pivotal moment as the country continues to navigate the COVID-19 crisis. As hospital leaders struggle with the problems of acute capacity management, physician scarcity, and cost optimization, it has become clear that virtual care will continue to be a critical component of the healthcare industry’s ability to deliver better care to patients.”
SOC Telemed, founded in 2014, has raised over $180 million venture capital. SOC Telemed raised $50 million funding in 2016 through equity and a credit facility from CRG (previously known as Capital Royalty).