<!DOCTYPE html><html><head></head><body><a href="https://spacinsider.com/spac-profiles/" target="_blank">HighCape</a> (NASDAQ:CAPA) has entered into <a href="https://www.globenewswire.com/news-release/2021/02/18/2177804/0/en/Quantum-Si-a-Pioneer-in-Semiconductor-Chip-Based-Proteomics-to-Combine-with-HighCape-Capital-Acquisition-Corp.html" target="_blank">a definitive agreement</a> to combine with proteomics biotech firm Quantum-Si (QSi) for an enterprise value of $924.5 million, or 18.5x its 2023E revenue.
QSi produces advanced spectrometers and software tools for analyzing and sequencing genomes and proteomes.
The combined entity is expected to trade on the Nasdaq under the symbol “QSI” following the deal’s close the second quarter of 2021.
<h3>Transaction Overview</h3>
HighCape is financing the combination with the $115 million from its current trust and a $425 million PIPE at $10 per share. The PIPE drew institutional investment from Foresite Capital Management, Eldridge, ARK Invest, Glenview Capital Management, and Redmile Group.
Quantum-Si expects to come out of the deal with $514 million in cash on its balance sheet after a small debt paydown.
<img data-recalc-dims="1" loading="lazy" decoding="async" class="alignnone size-full wp-image-75042" src="https://i0.wp.com/spacinsider.com/wp-content/uploads/2021/02/qsi-overview.png?resize=640%2C391&amp;ssl=1" alt="" width="640" height="391" srcset="https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-overview.png?w=1058&amp;ssl=1 1058w, https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-overview.png?resize=556%2C340&amp;ssl=1 556w, https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-overview.png?resize=300%2C183&amp;ssl=1 300w, https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-overview.png?resize=1024%2C626&amp;ssl=1 1024w, https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-overview.png?resize=150%2C92&amp;ssl=1 150w, https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-overview.png?resize=768%2C470&amp;ssl=1 768w" sizes="auto, (max-width: 640px) 100vw, 640px">
Existing QSi shareholders are expected to own 60.8% of the combined entity, while HighCape shareholders take 7.9% and PIPE investors 29.1%. The SPAC’s sponsor is expected to own 2.2%.
The parties have yet to file their merger agreement in an 8-K, so there may be additional terms to the deal not outlined in the presentation and press release. But, these will be available on HighCape’s profile page as soon as they are made available.
QSi founder Dr. Jonathan Rothberg is expected to continue on as executive chairman of the combined entity with a voting majority through Class B shares offering 20 votes each.
Quick Takes: SPACs made their first foray into the world of proteomics last week with ARYA III’s (NASDAQ:ARYA) <a href="https://spacinsider.com/2021/02/08/arya-sciences-acquisition-corp-iii-to-combine-with-nautilus-biotechnology/" target="_blank">announced deal with Nautilus</a>. QSi’s platform approaches the same challenge as Nautilus, with a greater focus on hardware over software.
Both companies are working to identify and catalogue proteins as a part of a new frontier in biomedical research under the proteomics umbrella. Proteomics is essentially to proteins what genomics is to DNA, and researchers believe it could unlock just as many innovations as the sequencing of the human genome has brought.
Already, about 90% of drug therapies target a specific protein to alleviate ailments, but it is difficult to be targeted with these medicines because organisms produce different proteins both unique to themselves and the particular circumstances.
<img data-recalc-dims="1" loading="lazy" decoding="async" class="alignnone size-full wp-image-75039" src="https://i0.wp.com/spacinsider.com/wp-content/uploads/2021/02/qsi-hardware.png?resize=640%2C397&amp;ssl=1" alt="" width="640" height="397" srcset="https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-hardware.png?w=1066&amp;ssl=1 1066w, https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-hardware.png?resize=556%2C345&amp;ssl=1 556w, https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-hardware.png?resize=300%2C186&amp;ssl=1 300w, https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-hardware.png?resize=1024%2C635&amp;ssl=1 1024w, https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-hardware.png?resize=150%2C93&amp;ssl=1 150w, https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-hardware.png?resize=768%2C476&amp;ssl=1 768w" sizes="auto, (max-width: 640px) 100vw, 640px">
Nautilus is building a cloud-based machine-learning engine to more rapidly identify protein types detected in each sample that gets uploaded. QSi, meanwhile, is using semiconductors in an effort to build the best spectrometers for initial scans and final sequencing once proteins have been identified.
The advanced microchips in QSi’s machines allow for single-molecule resolution for both proteins and DNA and need to be regularly replaced as consumables.
QSi also provides cloud-based data analysis tools, but aims to really make its money on the devices themselves and consumable chip sales. These two different models mean that QSi and Nautilus stand to be complimentary rather than competing players in the $36 billion proteomics market. But, broadly speaking, the software-maker typically trades better than the hardware-maker in these instances.
ARYA III traded up sharply on day it announced the Nautilus deal reaching $22.43 by noon. And, in the admittedly very early running, QSi is receiving similar levels of enthusiasm, with the bid/ask for HighCape around $16 in premarket trading on the news.
The hardware market is large, but ultimately finite. QSi estimates that about 53,000 spectrometers stand to be digitized and replaced by its models in the near term with a total mass spectrometer market above 100,000 devices. It aims to have about 5,760 installations by 2025, with each of these generating on average $45,000 in consumables revenue per year.
<img data-recalc-dims="1" loading="lazy" decoding="async" class="alignnone size-full wp-image-75041" src="https://i0.wp.com/spacinsider.com/wp-content/uploads/2021/02/qsi-financials.png?resize=640%2C386&amp;ssl=1" alt="" width="640" height="386" srcset="https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-financials.png?w=1075&amp;ssl=1 1075w, https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-financials.png?resize=556%2C335&amp;ssl=1 556w, https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-financials.png?resize=300%2C181&amp;ssl=1 300w, https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-financials.png?resize=1024%2C617&amp;ssl=1 1024w, https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-financials.png?resize=150%2C90&amp;ssl=1 150w, https://i0.wp.com/old.spacinsider.com/wp-content/uploads/2021/02/qsi-financials.png?resize=768%2C463&amp;ssl=1 768w" sizes="auto, (max-width: 640px) 100vw, 640px">
It projects $17 million in revenue off of its 534 devices installed in 2021E, but expects both its revenue and margins to expand as consumables become a bigger part of the picture. QSi projects a gross margin of 65% in 2021E, which it expects to grow to 71% on $186 million in revenue in 2025E.
Given how early the whole proteomics sector is, it offers few listed comps for Nautilus and QSi. Both gained robust valuations in their deals even looking several years out with Nautilus valued at 11.7x its 2024E revenue and QSi at 8.8x this mark.
However, their similarly early-stage competitor in this space Seer (NASDAQ:SEER) IPO’d in 2020 and has risen to a market cap of $3.6 billion on less than $400,000 in revenue over the past 12 months.
<a href="https://assets.website-files.com/5e3ba888b619ec2d758ec4cb/602e47a1c5496f3a68af7fed_Quantum-Si%20PIPE%20Master%20Final%20Feb%2018.pdf" target="_blank">Click here for the full investor presentation</a>.
<hr>
<h3>ADVISORS</h3>
<ul>
<li>Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. is acting as legal advisor to Quantum-Si.</li>
<li>J.P. Morgan Securities LLC is acting as lead placement agent and Cantor Fitzgerald &amp; Co. is acting as co-placement agent for the PIPE.</li>
<li>Mayer Brown is acting as legal counsel to the placement agents.</li>
<li>White &amp; Case LLP is acting as legal advisor and J.P. Morgan Securities LLC is acting as exclusive financial advisor to HighCape.</li>
<li>Cantor Fitzgerald &amp; Co. is acting as capital markets advisor and underwrote the IPO of HighCape in September, 2020.</li>
</ul>
&nbsp;

</body></html>

post

HighCape Capital Acquisition Corp. (CAPA) to Combine with Quantum-Si in $924M Deal

Data

Data Presets

League Tables

Dashboards

Funding Table

Lockups & Earnouts

Corporate Actions

SPAC Performance

Footnotes

News & Analysis