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Foresight Acquisition Corp.

Foresight Acquisition Corp.

Jan 8, 2021 by Matt Cianci

PROPOSED BUSINESS COMBINATION: P3 Health Partners

ENTERPRISE VALUE: $2.229 billion
ANTICIPATED SYMBOL: tbd

Foresight Acquisition Corp. proposes to combine with P3 Health Partners.

P3 is a patient-centered and physician-led population health management company that supports providers, physicians, and practices in their journey from traditional volume-based models to value-based systems of care and wellness. P3 believes its extensive experience managing Medicare Advantage (MA) populations in global risk arrangements drives its differentiated model, which simultaneously improves care and decreases costs. P3 is a portfolio company of Chicago Pacific Founders who provided P3’s initial and growth capital.

P3 Health Partners Investment Highlights

  • Empowering Value-Based Care: Founded and led by physicians, P3 is a team of doctors, clinicians and support service professionals with a shared passion for delivering value-based care. P3 is dedicated to transforming healthcare for patients, providers, and payors with a proven physician-affiliated model that delivers high-quality, low-cost care to Medicare Advantage members.
  • Large Addressable Market for Medicare Advantage Patients: Substantial market opportunity to partner with physicians & payors that serve the 60 million estimated Medicare eligible beneficiaries in P3’s rapidly growing core $300 billion Medicare Advantage Market. P3 currently operates in 11 markets across four states and expects to add three to five new markets annually to drive 35% patient growth over the long-term through a mix of payor and provider opportunities.
  • Rapidly Scalable, Capital-Light Model: P3’s capital efficient growth approach leverages the existing installed physician base across the U.S., which enables accelerated market entry while maintaining the preexisting patient and physician relationship. P3 enters markets with payor and provider partnerships to rapidly scale member growth while developing a full network of primary care, specialty, and ancillary providers.
  • Experienced Management Team: P3 was founded and is led by one of the most experienced management teams in population health. The core management team has a 20-year track record with deep value-based care expertise and a proven ability to build and scale value-based care platforms.

As part of the transaction, Mark Thierer is expected to become the Chairman of the public company’s board.

SUBSEQUENT EVENT – 8-K 11/22/21

  • The Special Meeting was adjourned to 7:00 a.m. Central Time on Wednesday, November 24, 2021. Foresight intends to convene the Special Meeting on November 24, 2021 and then further adjourn the Special Meeting to 7:00 a.m. Central Time on Friday, December 3, 2021, to provide Foresight and P3 additional time to file a proxy supplement and to provide Foresight’s stockholders additional time to review and consider the information to be set forth therein. 
  • In connection with the anticipated further adjournment of the Special Meeting described above, Foresight stockholders will be able to continue to change their redemption election on or prior to 5:00 p.m., Eastern Time, on Wednesday, December 1, 2021. As of 5:00 p.m., Eastern Time, on November 16, 2021, the initial expiration of the redemption period, Foresight had received notice that holders of its Class A Common Stock elected to redeem approximately 27.6 million shares, or approximately 87% of the shares that were eligible for redemption, for an aggregate redemption price of approximately $276 million. Since that time, as of November 19, 2021, Foresight has received net revocations for approximately 7.9 million shares. As a result of the extension of the redemption period, the final number of redeemed shares is subject to change.
    • A condition to P3’s obligation to consummate the transactions contemplated by the Merger Agreement is that after giving effect to the exercise of redemption rights, the sale of the additional shares of Class A Common Stock in the PIPE or the sale of any other securities by Foresight and the payment of Foresight’s expenses, fees and costs related to the Merger Agreement, the amount of cash held by Foresight and Merger Sub (“Available Cash”) equals at least $400 million. Based on the level of redemptions, P3’s board of managers has elected to lower the required amount of Available Cash from $400 million to $200 million. This reduction of Available Cash will not impact the $180 million of cash to be added to the balance sheet of the post-combination company as a result of the transactions.

TRANSACTION

  • The combined company will have an estimated post-transaction enterprise value of $2.3 billion with an estimated equity value of $2.4 billion from the contribution of at least $180 million in cash proceeds from the transaction.
  • Proceeds will consist of up to $316 million of cash held in Foresight’s trust account, assuming no redemptions by Foresight’s public stockholders, and an additional fully committed private investment of over $200 million at $10.00 per share, including participation from funds and accounts managed by Fidelity Management & Research Company LLC and Janus Henderson Investors.
  • The net proceeds raised from the transaction will be used to support P3’s working capital and accelerate the national expansion of its proven platform.
  • The transaction is expected to result in P3’s existing members owning approximately 75% of the equity of the combined company.

fore trans overview

MERGER CONSIDERATION

  • The merger consideration to be paid to the members of P3 (the “P3 Unitholders”) will have an aggregate value of $2,126,000,000 (the “Merger Consideration”), and will (assuming no redemptions of Foresight Class A Common Stock and aggregate PIPE proceeds of $208,703,070) consist of
    • (i) 181,104,693 common units of the Surviving Company (“Surviving Company Common Units”) (with a deemed value of $10 per unit) (the “Equity Consideration”) and
    • (ii) cash in an aggregate amount of $314,953,070 (the “Cash Consideration”).
      • However, in the event the net cash of Foresight and the Surviving Company immediately after the closing of the Transaction (but excluding any cash held by P3 and its subsidiaries) is less than $180 million, the Cash Consideration will be reduced by such shortfall and the Equity Consideration would be increased by the amount of such shortfall, such that the Merger Consideration aggregate value of $2,126,000,000 will remain unchanged.

PIPE

  • $200 million at $10.00 per share, including participation from funds and accounts managed by Fidelity Management & Research Company LLC and Janus Henderson Investors.

LOCKUP

  • The Foresight Class A Common Stock held by the P3 Holders after the Closing to be locked-up for a period of six months following the Closing, while the Foresight Class A Common Stock received by FSG upon conversion of Foresight’s Class B Common Stock on the Closing Date will be locked-up for a period of one year following the Closing, subject to earlier release upon
    • (i) the date on which the last reported sale price of the Foresight Class A Common Stock equals or exceeds $12.50 per share for any 20 trading days within any 30-day trading period commencing at least 150 days after the Closing or
    • (ii) the date on which the post-combination company completes a liquidation, merger, capital stock exchange or other similar transaction after the Closing that results in all of the post-combination company’s stockholders having the right to exchange their shares of Foresight Class A Common Stock for cash, securities or other property.

SPONSOR SUPPORT AGREEMENT

  • FSG agreed to tender or cause to be tendered any and all Foresight warrants that FSG owns of record or beneficially pursuant to and in accordance with the terms of the Warrant Exchange Offer. FSG also agreed that once its Foresight warrants are tendered, it will not withdraw or cause or permit to be withdrawn any of such Foresight warrants from the Warrant Exchange Offer, unless and until the Sponsor Support Agreement has been terminated.

NOTABLE CONDITIONS TO CLOSING

  • The amount of cash held by Foresight and the Surviving Company in the aggregate, whether in or outside the Trust Account (collectively, the “Available Cash”) shall be at least $400,000,000
    • A condition to P3’s obligation to consummate the transactions contemplated by the Merger Agreement is that after giving effect to the exercise of redemption rights, the sale of the additional shares of Class A Common Stock in the PIPE or the sale of any other securities by Foresight and the payment of Foresight’s expenses, fees and costs related to the Merger Agreement, the amount of cash held by Foresight and Merger Sub (“Available Cash”) equals at least $400 million. Based on the level of redemptions, P3’s board of managers has elected to lower the required amount of Available Cash from $400 million to $200 million. 

NOTABLE CONDITIONS TO TERMINATION

  • By either Foresight or P3, if the Closing does not occur on or prior to November 21, 2021 (the “Outside Date”)
  • Upon termination of the Merger Agreement, Foresight will be obligated to pay P3 a termination fee of $5.0 million if
    • (i) the Merger Agreement is terminated by Foresight to enter into a definitive agreement for a superior transaction proposal or
    • (ii) the Merger Agreement is terminated by P3 for a material breach of Foresight’s non-solicitation covenants, at the time of such termination a bona fide superior transaction proposal was known to the Foresight Board and Foresight enters into a definitive agreement with respect to a superior transaction proposal within 12 months of such termination; provided, in each case, such termination fee shall be payable concurrently with the execution of such definitive agreement.

ADVISORS

  • J.P. Morgan Securities LLC acted as exclusive financial advisor to P3.
  • Latham & Watkins LLP acted as legal advisor to P3.
  • Greenberg Traurig, LLP acted as legal advisor to Foresight.
  • Cowen and William Blair served as financial advisors to Foresight.
  • J.P. Morgan Securities LLC, Cowen and William Blair acted as co-placement agents on the PIPE.
  • Mayer Brown acted as placement agent counsel.

MANAGEMENT & BOARD

Executive Officers

Michael Balkin, 61
Chief Executive Officer and Director

Mr. Balkin has over 30 years of experience in working with public companies in the small cap space. Mr. Balkin was a partner and formerly the co-Manager of the William Blair Small Institutional portfolio and the William Blair Small Cap Growth Fund, which he and his partners, Karl Brewer and Mark Fuller started, in 1999. He and his team managed nearly $1.8 billion dollars in total assets and have been named among the top small cap funds multiple times by publications such as Barrons, Morningstar, Lipper and Institutional Investor Magazine. From 2005 to 2008, Mr. Balkin was a partner at Magnetar Capital, LLC, a multi-strategy hedge fund located in Evanston, Illinois. While at Magnetar, Mr. Balkin was the Portfolio Manager in charge of the small cap long-short strategy and was also the Chief Investment Officer of Magnetar Investment Management, a wholly owned asset management subsidiary of Magnetar Capital. He rejoined William Blair & Company in 2008. He originally joined William Blair in 1990, working in the sell-side institutional research sales group, specializing in small cap growth companies. Prior to joining William Blair, he was the co-founder of Cityview Associates, Inc., a real estate firm specializing in “value-added” real estate transactions. Prior to starting Cityview Associates, Mr. Balkin had various roles at First Chicago and Bankers Trust. In addition to his work with William Blair, Mr. Balkin has helped dozens of small companies grow as an angel investor, mentor and board member. He is currently the Chairman of the Board of Performance Health Systems, LLC and is a member of the board of managers of the Innventure Fund, an Intellectual Property-based development fund started by Greg Wasson. Mr. Balkin is also active in many charities and is on the board of the Friends of the Israeli Defense Forces, Good Sports and is a major advocate and fund raiser for Cystic Fibrosis and the Illinois Holocaust Museum. Mr. Balkin graduated with a Bachelor’s degree in Economics from Northwestern University, where he was also a two year Captain of the tennis team.

Gerald Muizelaar, 46
Chief Financial Officer

Mr. Muizelaar brings over 15 years of financial leadership in private equity, manufacturing, retail and customer service. Mr. Muizelaar has served as Vice President of Finance for Wasson Enterprise, the family office of Greg Wasson, since 2017. Mr. Muizelaar’s strong focus implementing robust financial processes and systems, ensuring regulatory compliance, and bolstered financial visibility have been a key factor in Wasson Enterprise’s success. As a former North American Finance Manager for Amazon, Mr. Muizelaar led all U.S., Canadian and Latin American customer service finance teams. He and his team provided financial insights and analysis for a customer service network that encompassed over 10,000 employees and an annual P&L in excess of $250 million. Mr. Muizelaar’s leadership and deep understanding of operations were influential in optimizing costs for Amazon’s North American Customer Service team, while simultaneously growing its operations by 30% annually and consistently driving quality improvements to keep Amazon ranked #1 in the World for Customer Service. Mr. Muizelaar holds a Bachelor of Business Administration from Acadia University and a MBA from Dalhousie University.

Board of Directors

Greg Wasson, 62
Chairman

Mr. Wasson currently serves as President and Founder of his own family office, Wasson Enterprise. Wasson Enterprise’s focus is to partner with entrepreneurs and operators to build sustainable, high-growth businesses that do well by doing good. As the former CEO of Walgreens, Mr. Wasson has extensive global operational and management experience, as well as extensive knowledge of the retail and healthcare industries. Mr. Wasson attended Purdue University’s School of Pharmacy, receiving his pharmacy degree in 1981. Before his senior year, he was invited to become one of the first pharmacy services interns in Walgreens’ corporate offices—an opportunity that led to his being hired by Walgreens upon graduation and that changed the course of his future career. Mentored by many company leaders through the years, together with his outstanding performance in positions of increasing responsibility, Mr. Wasson served Walgreens for 34 years. As Walgreens CEO, Mr. Wasson led the Fortune 35 company to record fiscal 2014 sales of $76.4 billion. He is credited with creating significant financial and shareholder value, initiating and completing transformative mergers and investments, leading complex organizational and structural change, assembling a diverse and high-performance senior leadership team, and establishing Walgreens’ position as an industry leader. Before retiring from Walgreens, Mr. Wasson had transformed an iconic 114-year-old domestic company into the first global pharmacy-led, health, well-being and beauty enterprise via the successful merger with European-based Alliance Boots to create Walgreens Boots Alliance. Mr. Wasson currently serves on the Board of Directors of OptimizeRx Corp. (NASDAQ: OPRX).

Brian Gamache, 62
Director 

Mr. Gamache was the former Chairman and CEO of WMS Industries Inc., a designer, manufacturer and marketer of games for the casino and on-line gaming industries. Prior to rejoining WMS, he served as President of Wyndham International’s Luxury and Resort Division. Before Wyndham, he served as President and Chief Operating Officer of WHG Resorts and Casinos, Inc., a subsidiary of WMS Industries. He previously held various executive positions with Marriott Hotel Corporation and Hyatt Hotels Corporation. Mr. Gamache is on the Board of Directors at Welbilt, Inc. and currently serves as an advisor to several private equity firms and corporations. He is a guest lecturer at Northwestern University’s Kellogg School of Management. Mr. Gamache graduated from the University of Florida with a degree in Business Administration, where he currently serves as a member of the Dean’s Council to the Warrington School of Business.

Robert Zimmerman, 69
Director 

Mr. Zimmerman is an independent consultant since retiring from Walgreens in 2014, focusing on healthcare, specifically retail pharmacy services and pharmacy benefit management. His primary consulting work has been with knowledge transfer companies (GLG and Guidepoint) with significant short-term assignments with end business clients as well as hedge funds and consulting firms. He has also consulted directly with private equity and hedge funds. Until April 2014, Mr. Zimmerman served as Chief Strategy Officer and SVP of Corporate Development at Walgreens. In these roles, he worked directly with the CEO and Executive Committee on strategic plans helping transform Walgreens from a drug store chain to an international integrated health care provider. He also led the development and execution of Walgreens M&A strategy, including the largest transaction in Walgreens’ history, the acquisition of Alliance Boots. Prior to his tenure as CSO, he served as CFO and EVP of WHP Health Initiatives, Walgreens’ managed care division. He held responsibility for the division’s finance, strategy, new business and product development initiatives, acquisitions, pharmaceutical trade relations, and Customer Care Center operations. Mr. Zimmerman currently also serves as a Board Member on the State of Illinois Board of Pharmacy (since 2016), where he was appointed by the Governor of Illinois. Mr. Zimmerman graduated from Eastern Illinois University in 1973 with a Bachelor of Finance, and from Northern Illinois University in 1984 with an MBA.

John Svoboda, 63
Director 

Mr. Svoboda co-founded SC in January 1998 with Michelle Collins. Mr. Svoboda serves on the boards of SC portfolio companies BPI/Incite, One North Interactive, Sonoma Creamery and SWC Technology Partners. Prior to co-founding SC, Mr. Svoboda worked in the Corporate Finance Department of William Blair & Company LLC (1983 to 1997), where he managed Business Development and became a Partner in 1988. Mr. Svoboda serves as a trustee of the University of Chicago Medical Center. Mr. Svoboda also serves as a trustee for the Otho S. A. Sprague Memorial Institute, the Auditorium Theatre where he was Chairman of the Board, as an honorary trustee of Marwen and as a life trustee of the Francis W. Parker School. He served on the Advisory Council of Stanford’s Graduate School of Business and served on the Steering Committee for the Stanford Campaign. Mr. Svoboda has also served on several alumni and fundraising committees for both Williams College and the Stanford Business School, as well as capital campaigns for the Greater Chicago Food Depository and the University of Chicago Comer Children’s Hospital. Mr. Svoboda is also active as a mentor and selection committee member for the Pat Tillman Foundation and is a member of the Commercial Club of Chicago. Mr. Svoboda graduated from Williams College with a BA in 1979 and received his MBA from the Stanford Graduate School of Business in 1983.

 

ByMatt Cianci