Ishrak SPAC Nets $862.5M in IPO
A special purpose acquisition corporation (SPAC) led by former Medtronic CEO Omar Ishrak raised gross proceeds of $862.5 million through its initial public offering (IPO) completed earlier this month.
Compute Health Acquisition Corp. originally outlined a goal of raising $750 million in filings with the U.S. Securities and Exchange Commission (SEC) last month. The company announced closing its IPO on Feb. 9.
What does the company make? Nothing. What services does it provide? None.
But SPACs are all the rage on Wall Street right now. A SPAC is a shell company that raises money through an IPO and looks to acquire a private company, which then becomes a public company through the deal. Some see SPACs as an easier way for startup companies to go public.
According to a statement from the company:
“The company is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. The company intends to focus on healthcare businesses that are already leveraging, or have the potential to leverage, computational power, with an emphasis on companies in the medical device space, including imaging and robotics, and companies operating in the virtual care space, including telehealth, care delivery and next-generation payor and provider models.”
In a Jan. 20 filing with the SEC, the company indicated it has “not identified any potential business combination target.”
The company’s stock went public at $10 per share on the New York Stock Exchange. It closed on Monday at $11.37 per share.
Ishrak co-founded the company with Dr. Jean Nemhe and Joshua Fink. Ishrak is the company’s chairman; Nemhe and Fink are co-CEOs. Nemhe cofounded Digital Surgery in London in 2011. The company was acquired by Medtronic in February 2020. Fink is managing partner of Ophir Holdings, a private investment company.
Ishrak served as CEO of med-tech giant Medtronic from June 2011 until April 2020. According to his LinkedIn profile, Ishrak remains based in the “greater Minneapolis-St. Paul area.” Ishrak is also currently the chairman of the board for the California-based Intel Corp., the Fortune 500 semiconductor giant.
Compute Health Acquisition sold 86.25 million shares in its IPO, including 11.25 million shares with the full exercise of the underwriters’ over-allotment option.
The proceeds of $862.5 million is the total amount raised before deducting underwriting discounts, commissions, and other expenses related to the offering.
The only ownership statement filed so far indicates that the Saudi Arabia-based Public Investment Fund owns 7.5 million shares, or 8.7 percent of the company. Any entity owning more than 5 percent of a public company must file with the SEC.
Last month, the Star Tribune reported that Medtronic was interested in buying 1.5 million shares of the company. It’s not yet clear if Medtronic made the investment.
Compute Health Acquisition Corp. is incorporated in Delaware, as are roughly two-thirds of all Fortune 500 companies. The draw is Delaware’s tax benefits, the state’s ability to quickly processing filings, and a generally pro-business climate.