Yesterday afternoon, Healthcare Merger Corp. (HCCOU), filed their $200 million SPAC, focusing on businesses in the healthcare industry and will be sponsored by MTS Health Partners, L.P., or MTS, an Investment Banking firm focused exclusively on the healthcare sector. Healthcare Merger Corp. will be led by Steven J. Shulman, as CEO, Charles J. Ditkoff, as President, and Dennis M. Conroy, as CFO.
Mr. Shulman, in particular, is currently the Chairman of Magellan Health, Inc. where he previously served as Chief Executive Officer from 2002 to 2008 and spearheaded its turnaround and restructuring following bankruptcy. He is also currently the Chairman of Quartet Health, Inc., a healthcare technology company which connects primary care and mental health providers, and CareCentrix, Inc., a post-acute managed care company. However, maybe the most recognizable name in Mr. Shulman’s background is Prudential Healthcare, Inc., where he was Chairman, President and Chief Executive Officer and led the company’s successful sale to Aetna in 1999.
As for Mr. Ditkoff and Mr. Conroy, both are currently employed by MTS, the sponsor, as Senior Advisor and COO/CFO, respectively. Furthermore, if you visit the MTS website, you will see a long list of prior transactions where MTS served as the financial advisor. Clearly, MTS knows the healthcare space.
So once again, we see a good pairing of operators and dealmakers, which is ideal for a SPAC searching within a specified industry. You need both skill sets to properly evaluate a company as well as structure a combination, so in general, these types of teams should produce better received acquisitions.
As for the terms, once again, this is a 24 months, 100% in trust, 1/2 warrant structure, as we’ve seen so frequently as of late. However, there are no added “extras” like a warrant call for shares, or an anchor investor, etc. It’s fairly straightforward. However, the terms feel right and Cantor should easily be able to build a big book, especially given how well their IPOs have performed this year. Look for Healthcare Merger Corp. to price the second week of December.
Summary of terms below: