The funding through a mix of equity and convertible debt will provide the enlarged UpHealth with the capital required for executing its strategy
GigCapital2, a special purpose acquisition company (SPAC) sponsored by investment group GigCapital Global, has raised $285m in conjunction for its previously announced mergers with UpHealth and Cloudbreak Health.
The US-based SPAC has raised the amount through a private placement with certain institutional investors.
In November 2020, the company signed two separate agreements to acquire UpHealth and Cloudbreak Health and subsequently create a publicly-traded digital healthcare company by combining the businesses.
UpHealth is a digital health technology and tech-enabled services platform while Cloudbreak Health is a telehealth technology provider, which had developed video remote interpreting (VRI).
The combined company through the merger, which will operate as UpHealth, will have a pro forma enterprise value of nearly $1.35bn.
It will be an integrated global platform catering to four digital health markets that include integrated care management, digital pharmacy, global telehealth, and tech-enabled behavioural health.
UpHealth co-founder and co-chairman Chirinjeev Kathuria said: “The GigCapital team understands what it takes to successfully bring together businesses to accelerate growth.
“Completing this financing is a key step in bringing together the complementary suite of solutions that will allow UpHealth to power healthcare’s digital transformation.”
The private placement announced by GigCapital2 includes a total of three million shares of the SPAC’s common stock at $10 per share and $255,000,000 of five-year unsecured convertible notes.
According to the SPAC, the notes will bear interest at a rate of 6.25% per year and will be convertible into common shares of the enlarged UpHealth at a conversion price of $11.50.
GigCapital Global founding managing partner and GigCapital2 executive chairman Avi Katz said: “This oversubscribed, differentiated, unique funding construct, a mix of equity and convertible debt, will provide the combined UpHealth businesses with the capital needed to continue to execute on its strategy while limiting dilution and maximising value for all shareholders.
“While business fundamentals are core, the pride of our team is the focus on purpose, mentoring, and support we offer to the exceptional executive team of UpHealth as they begin a new adventure in the public market.”