Chamath Palihapitiya has found his next SPAC target – ???? Clover Health, a Medicare insurance start-up supported by Alphabet
Clover to go public through merger with Social Capital Hedosophia Holdings Corp III, a special purpose acquisition company The deal values Clover at $ 3.7 billion and includes up to $ 1.2 billion in cash, including $ 400 million will come from a private investment led by Palihapitiya in the public entity
(Palihapitiya will be on CNBC’s Squawk Box Tuesday at 8 a.m. ET to discuss the deal)
The move came just three weeks after Palihapitiya unveiled its $ 4.8 billion PSPC deal with real estate startup Opendoor The billionaire was successful with his first blank check transaction that went public with the company to Virgin Galactic space tourism last year and has been particularly active in the SPAC world in 2020Â Palihapitiya previously revealed that he had reserved « IPOA » tickers for « IPOZ » on the New York Stock Exchange
Founded in 2013, Clover sells Medicare Advantage in the US and currently has over 57,000 members in seven states The deal will provide « significant capital » for the company to « advance and improve the health of the elderly in the states United, « the company said in a statement Tuesday.
A PSPC is formed to raise funds to finance a merger or acquisition typically within two years The target business will be made public through the acquisition
As an alternative to traditional IPOs, PSPCs have experienced explosive growth this year amid unprecedented volatility brought on by the coronavirus pandemic Total PSPC proceeds topped $ 40 billion this year , almost tripling the level of a year ago and on track for a record year, according to Refinitiv
Many investors and businesses look to the PSPC route for its time efficiency as well as certainty of execution Businesses can also skip the touring process and avoid some of the scrutiny that comes with an introduction on the traditional stock market The involvement of leading investors including hedge fund billionaire Bill Ackman and Oakland A executive Billy Beane has brought more hype to this vehicle
Palihapitiya said last month that the PSPC boom is healthy for the overall market which is shrinking in number of shares and is heavily concentrated in mega-cap technology names
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Clover Health, Social Capital, Chamath Palihapitiya, Special Purpose Acquisition Company
News from around the world – US – Chamath Palihapitiya to release Clover Health as part of » another PSPC contract worth $ 3.7 billion
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