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Little-known Excelera SPACs at $459M valuation

Jun 15, 2022
Illustration of two checks forming a health plus.

Illustration: Aïda Amer/Axios

Excelera DCE, which uses machine learning to better align doctors with the incentives of Medicare's value-based delivery programs, agreed to combine with a SPAC called Future Health ESG Corp.

Why it matters: Excelera has flown under the radar but is now notable given the broader dearth of new SPAC mergers (and deaths of existing ones).

  • "We're not going to be distracted by the short-term sentiment" surrounding previous SPAC deals, Future Health co-founder Travis Morgan tells Axios.
  • Supporting the evolution toward value-based care "is still an underserved, undercapitalized niche," Morgan adds.

By the numbers: The transaction values the combined company at an initial enterprise value of approximately $459 million, or 1.3x annualized Q1 2022 revenues of $352 million.

  • That implies a pro forma equity value of $780 million.
  • The deal also includes a $100 million PIPE.

Behind the scenes: Excelera previously was looking for growth capital, Morgan says. It previously raised private funding from family offices, angel investors and a couple of institutional investors.

Zoom in: Founded by Sanjay Patil, Excelera launched a Medicare Direct Contracting Entity (DCE) in January 2022, which manages care for over 22,000 seniors in California and Hawaii. Proceeds from the SPAC merger will be used to expand to new geographies.

The intrigue: The post-SPAC performance of all be a few exceptions in health tech has been pretty ugly, meaning that Excelera is seeking to buck a trend.

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