Virgin Group founder Sir Richard Branson is rocketing into the health care space by ponying up a large chunk of money to take genetic testing outfit 23andMe public in the latest splashy SPAC deal.
The risk-taking billionaire business mogul Branson told Yahoo Finance Live the deal is a “no brainer.”
“At Virgin, we try to partner with companies that make a real difference in the world like health care companies, energy companies and anything that makes a difference,” Branson said.
Branson invested early in 23andMe’s Series A funding round, so has a long-time relationship with Anne Wojcicki, the consumer DNA testing company’s co-founder and CEO.
“And 23andMe, just their drug development side could shorten the development [time] of a new drug by as much as two and a half years, which makes coming up with new drugs that much quicker,” said Branson. “And I think 23andMe can lead to people having a healthier lifestyle.”
As part of the deal, Branson’s blank check VG Acquisition Corp. and 23andMe will merge. The transaction values 23andMe at $3.5 billion. 23andMe is expected to deliver up to $759 million in gross proceeds. Branson and Wojcicki will each invest $25 million into the company.
The deal is slated to close sometime in the second quarter.
Wojcicki told Yahoo Finance Live that now felt like the right time to go public, ahead of what could be key business wins in the drug development space in partnership with GlaxoSmithKline (which invested $300 million into 23andMe in 2018).
“It’s all about the maturity, the right time to be public as well as this opportunity. We’re over a decade old now, we have the team in place, we have the infrastructure that is built with our customers, we have this validated platform. It’s the right time to step up with that maturity of being a public company,” Wojcicki said.
In December, 23andMe raised $82.5 million, Yahoo Finance sister publication TechCrunch reported. That brought the total amount raised by 23andMe to $850 million.
Yahoo Finance dug into the investor presentation detailing the transaction. Below are several slides that stood out.
23andMe doesn’t expect to be adjusted operating profits positive until 2023.
23andMe sees a steady progression in the growth rates of its consumer and therapeutics businesses.
What Branson’s team is seeing in 23andMe.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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