Merger FHLTU

Excelera to Become Publicly Traded via Merger with Future Health

, SPAC Research

Excelera DCE, a leading Accountable Care Organization and AI Platform, and Future Health ESG Corp. (NASDAQ: FHLT), a special purpose acquisition company, announced today they have entered into a definitive business combination agreement that will support the expansion of Excelera's science-driven approach to managing care for seniors. Upon completion of the transaction, the combined company is expected to operate as Excelera Health, Inc., and is expected to be listed on the Nasdaq under the new ticker symbol "XLRA".

Excelera is a technology-enabled care delivery platform that equips physicians with precision medicine insights and financial resources to succeed in Medicare's value-based delivery programs. Excelera earns profits by effectively managing cost in the value chain so that doctors can deliver better care while realizing substantial improvements in their bottom line. Like Airbnb and Uber for independent homeowners and drivers, Excelera offers a platform that allows physicians to remain independent, but operate with the sophistication of a nationally networked health maintenance organization (HMO). Excelera provides the contracting vehicles, technology, and other necessary services to make their doctors clinically and financially successful. Excelera's novel Human Insights™ platform combines proprietary machine learning algorithms with genomics and other data to proactively focus on prevention and management of chronic disease. By using Human Insights™ to deliver a 14.1% reduction in cost of care vs the Medicare benchmark, Excelera MSSP ACO (a predecessor plan to Excelera DCE) ranked #8 in care efficiency among all 513 participating MSSP ACOs in 2020. Excelera's Global & Professional Direct Contracting plan went live 1/1/2022 with over twenty-two thousand covered Medicare lives in California and Hawaii.

The transaction values the combined company at an initial enterprise value of approximately $459 million, a multiple of 1.3x annualized Q1 22 revenues of $352 million. Forty million shares will be issued to the seller at closing, and an earn-out of 20 million additional shares will be payable when the Company achieves $150 million in revenue for any calendar quarter prior to the fifth anniversary of the closing. Excelera’s parent will roll over 100% of its equity stake into the new company.

After transaction expenses, the proposed business combination is expected to deliver at least $105 million, and up to $282 million of net proceeds, including the contribution of up to $201 million of cash held in Future Health's trust account and a $100 million fully subscribed private placement (PIPE) of common stock of the combined company, priced at $11.00 per share. PIPE investors have also entered into a forward purchase agreement to acquire an additional $20 million of FHLT shares on the open market prior to closing of the transaction.

Including the earn-out and assuming no public shareholders of Future Health exercise their redemption rights, Excelera’s shareholders will own approximately 64%, Future Health shareholders will own approximately 21%, PIPE investors will own approximately 10%, and Future Health's sponsors will own approximately 5% of the issued and outstanding shares of common stock of the combined company.

All common shares held by Excelera’s parent, PIPE investors, and the Sponsor are subject to a Lock-up Agreement until the earlier of one year after the Closing, or with respect to 1/3 of the Lock-up Shares in each instance, the dates subsequent to the Closing on which the price of the Company’s common stock equals or exceeds a target price of $12.00, $13.00 and $14.00 per share. The Lock-up Agreement further provides that no more than 1/3 of originally issued lockup shares may be transferred within any continuous 90-day period.

The transaction has been unanimously approved by the boards of Excelera and Future Health, and is subject to approval by Future Health's shareholders and other customary closing conditions. The transaction is expected to close during the second half of 2022.

Cantor Fitzgerald & Co., BTIG, LLC, and Roth Capital Partners, LLC are acting as capital markets advisors to Future Health. Buchanan Ingersoll & Rooney PC is serving as legal counsel to Excelera, and McDermott Will & Emery LLP is serving as legal counsel to Future Health.

Read more