Merger LCAPU

Lionheart Acquisition Corp. II Announces Business Combination With MSP Recovery

, SPAC Research

MSP Recovery, LLC, specializing in Medicare Secondary Payer recovery rights and the recovery of improperly paid Medicaid, and commercial payments was founded in 2014. Lionheart Acquisition Corp. II (Nasdaq: LCAP, “Lionheart”), a special purpose acquisition company, today announced a definitive agreement for a business combination that would result in MSP Recovery becoming a publicly listed company.

Upon the closing of the transaction, the combined company will be named MSP Recovery, and its common stock, existing warrants and the Additional Warrants are expected to trade on Nasdaq under the new ticker symbols “MSPR”, “LCAP W”, and “MSPR W”, respectively. The pro forma enterprise value of the combined company is approximately $32.6 billion. Upon closing, at that valuation, the transaction would be one of the top 3 largest SPAC transactions ever.

Founded in 2014, MSP Recovery has become a Medicare, Medicaid, commercial, and secondary payer reimbursement recovery leader, disrupting the antiquated healthcare reimbursement system with data-driven solutions to secure recoveries against responsible parties, while providing the industry with comprehensive compliance solutions.

The business combination values MSP at a $32.6 billion pro forma enterprise value, excluding cash on the balance sheet. The transaction is anticipated to generate gross proceeds of up to approximately $230 million of cash, assuming no redemptions by Lionheart’s public stockholders. These funds will be used to fund operations and growth.

Upon completion of the business combination and subject to compliance with applicable law, approximately 1.029 billion Additional Warrants will be issued to former Lionheart stockholders who have not elected to redeem their shares of Lionheart common stock in connection with the business combination. Each Additional Warrant will represent the right to purchase one share of the combined company’s common stock at $11.50 per share with a 5-year tenor.

No dilution is expected to result from the issuance of the Additional Warrants because the MSP founders have agreed to sell to the combined company for the same value as the exercise price of a share issued pursuant to an Additional Warrant, one share of the combined company’s common stock (or an equivalent security, under certain circumstances) upon the exercise of the Additional Warrants. As a result, on a net basis, following the repurchase of the applicable securities from the MSP Founders, there is anticipated to be no increase in the number of outstanding shares as a result of the exercise of the Additional Warrants.

The board of directors of Lionheart has unanimously approved the proposed transaction, which is expected to be completed in the fourth quarter of 2021, subject to, among other things, the approval by Lionheart’s stockholders and satisfaction or waiver of other customary conditions.

Keefe, Bruyette & Woods, a Stifel Company, is serving as financial advisor to MSP Recovery. Nomura Securities International, Inc. is serving as financial and capital markets advisor to Lionheart Acquisition Corp II. Weil, Gotshal & Manges LLP is serving as legal counsel to MSP Recovery. DLA Piper LLP is serving as legal counsel to Lionheart Acquisition Corp II.

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