Swiftmerge Acquisition Corp. (IVCP) to Combine with HDL Therapeutics in $480M Deal
Swiftmerge (NASDAQ:IVCP) has entered into a definitive agreement to combine with commercial-stage biotech firm HDL Therapeutics at a $480 million valuation.
Vero Beach, Florida-based HDL has developed a medical device designed to remove plaques from patients’ coronary arteries and has been approved for some high-risk patients.
The combined company is expected to trade on the Nasdaq under the symbol “HDLT” once the deal is completed in the fourth quarter of 2023.
Transaction Overview
Swiftmerge has about $24 million in its current trust after seeing 90% of its trust redeemed in a June extension vote that allowed it to push its transaction deadline to a maximum date of March 15, 2024.
It hopes to supplement this with an $80 million PIPE and it must maintain at least $30 million in cash available net of expenses in order for the deal to close.
Both the company and sponsor have agreed to a six-month lock-up.
The parties have not yet released their merger documents or an investor presentation, but Swiftmerge’s profile page will be updated once additional terms and details are made available.
Quick Takes: Swiftmerge hasn’t completely lived up to its name as it originally listed in December 2021, and it noted when it announced a letter-of-intent with HDL in April that it expected make it to a definitive agreement by the end of the second quarter.
Both sides may have had to adjust plans somewhat once Swiftmerge’s redemption numbers from the June vote came in. Delays in arranging a PIPE that has still not been finalized could have also played a role.
But, one way or the other, Swiftmerge brings some interesting expertise to bear on the transaction, including some muscles it may not have expected to flex in its dealmaking process.
The SPAC’s S-1 noted that it hoped to find a business that “can benefit from our management team’s world-class operating experience in the consumer industry” with a particular focus on disruptive internet-based consumer brands.
Swiftmerge Chairman George Jones and CEO John Bremme are each co-founders of IVEST, whose current private equity portfolio includes three e-retailers of branded products and a grocery chain it exited last year.
But, they brought in reinforcements with the Board nomionation of former NATO Supreme Allied Commander and presidential candidate Wesley Clark. More to the point, the SPAC’s Board also includes Dr. Leonard Makowka and Dr. Courtney Lyder who specialize in organ transplants and ulcers, respectively.
Their nominations provided an interesting way for Swiftmerge to keep its options open should the situation make it advantageous to switch track into the sectors where medical knowledge would be key.
Dr. Makowka in particular has had a career that saw him move from transplanting the first pig’s liver into a human to serving as an investor and Board member of several biotech firms.
He noted in the parties’ announcement press release that HDL’s particular approach treating cardiovascular disease by targeting plaques has the potential to disrupt the current standard of care for preventing cardiac events.
HDL’s PDS-2 system does this by using patients’ own plasma to create natural lipoproteins that can reduce plaque blockages and lower overall risk levels. High-risk plaques in general are responsible for the majority of sudden cardiac events, according to HDL.
The PDS-2 machine first collects patients’ plasma into a sterile bag using a plasmapheresis device to separate it from blood cells. This plasma is then treated with a delipidation solution, filtered and pumped into a second bag, from which it is pumped back into the patient’s body.
The PDS-2 has already been approved to treat homozygous familial hypercholesterolemia (HoFH), a disorder that renders the body less capable of removing harmful cholesterol and more susceptible to heart attacks at an early age.
HoFH is considered rare, but HDL believes this same approach could be used to treat other disorders of the heart, kidneys, arteries and even neurodegenerative diseases like Alzheimer’s. Such applications have not yet been approved, however, according to its website.
Given that HDL has an approved treatment already in the market, investors are likely to be itchy to get a look at the company’s financials.
This will be noteworthy both to see what scale of market it has found for itself with HoFH and beyond that what the company thinks the cost would be to expand into other treatment areas, although it appears $30 million is the number HDL has in mind.