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HH&L Acquisition Co. *

HH&L Acquisition Co. *

Jan 20, 2021 by Matt Cianci

LIQUIDATION – 2/7/24 – LINK

  • The Company anticipates that the last day of trading in the Class A ordinary shares will be February 9, 2024.
    • The per-share redemption price will be approximately $10.79

The below-announced combination was terminated on 6/6/23.  It will remain on the page for reference purposes only. Once a new combination is announced it will be added to the top of the page.

PROPOSED BUSINESS COMBINATION: DiaCarta, Ltd. [TERMINATED]

ENTERPRISE VALUE: $584 million
ANTICIPATED SYMBOL: tbd

HH&L Acquisition Co. proposes to combine with DiaCarta, Ltd., a precision molecular diagnostics company and developer of oncology and infectious disease tests.

  • DiaCarta is a Pleasanton, California-based translational genomics and precision molecular diagnostics company that provides highly sensitive and advanced technologies to improve the way molecular diagnostics and translational genomics impact healthcare treatment plans.
  • DiaCarta’s mission is to improve the well-being of individuals around the world.
  • Underpinned by its proprietary XNA technology and SuperbDNA™ technology platforms, DiaCarta offers a range of products and testing services, including its early detection ColoScape™ Colorectal Cancer blood test, RadTox™ cfDNA test, it’s FDA EUA approved QuantiVirus™ SARS-CoV-2 Tests, its QClamp® qPCR tests and OptiSeq™ XNA-NGS panels.
    • Its XNA technology provides a high level of sensitivity as it clamps the wild-type sequence and amplifies the mutant target sequence.
    • Using this technology, the Company has developed its highly sensitive, early detection ColoScape™ Colorectal Cancer blood test.
    • The Company’s revolutionary RadTox™ solution is powered by its SuperbDNA™ technology that provides a high level of sensitivity in detecting target DNA or RNA by amplifying the signal and requiring no RNA/DNA extraction or amplification.
    • RadTox™ personalizes radiation and chemotherapy, serving to assess tumor response and enhance patient care.
  • Based in Pleasanton, California, the Company is ISO certified, GMP-compliant and offers CLIA certified laboratory services to its customers.

EXTENSION – 8/10/23 – LINK

  • The SPAC approved the extension from August 9, 2023 to February 9, 2024.
    • 2,025,832 shares were redeemed for $10.55 per share.
    • There will be no deposit into the trust account.

SUBSEQUENT EVENT – 8/3/23 – LINK

  • The SPAC entered into a non-redemption agreement with several unaffiliated third parties in exchange for them agreeing not to redeem an aggregate of 500,000 shares
    • The Sponsor will transfer 100,000 Class B shares to the non-redeeming shareholders

EXTENSION – 5/9/23 – LINK

  • The SPAC approved the extension from May 9, 2023 to August 9, 2023, and the option to further extend the date by which it has to consummate a business combination beyond August 9, 2023 up to six times for an additional one-month each time to February 9, 2024.
    • 3,887,893 shares were redeemed.
    • $487,500 will be deposited into the trust account to extend until 8/9/23; $162,500 per month will be deposited thereafter as needed.

TRANSACTION

  • The aggregate merger consideration paid to DiaCarta equity holders in connection with the Business Combination consists of 46 million shares of common stock of HH&L, after its domestication, which is calculated based on a pre-money equity valuation of DiaCarta at $460 million on a fully diluted basis.
  • Pursuant to the terms of the Business Combination Agreement, the Business Combination will be effected in two steps.
    • First, before the closing of the business combination, both HH&L and DiaCarta will deregister in the Cayman Islands and domesticate as Delaware corporations.
    • Second, at the closing, a wholly-owned subsidiary of HH&L will merge with and into DiaCarta and DiaCarta will survive the merger as a wholly-owned subsidiary of HH&L.
  • HH&L will then change its name to “DiaCarta, Inc.”

HH&L transaction overview

PIPE

  • There is no PIPE mentioned in the current documents, but the presentation (slide above) mentions a $50M PIPE.  The presumption is this deal intends to get a $50M PIPE in the future.

LOCK-UP

Company & Sponsor

  • At the Closing, Domesticated SPAC, Sponsor, certain Domesticated SPAC shareholders and certain Domesticated Company shareholders will enter into a lock-up agreement, pursuant to which, each Holder will agree not to transfer any Lock-Up Shares beginning on the Closing Date and ending on the earlier of:
  • (i) 12 months after the Closing Date or
  • (ii) subsequent to the Closing Date, the date on which the closing trading price of shares of Domesticated SPAC Common Stock equals or exceeds $12.00 for any 20 trading days within any 30 trading day period commencing 150 days after the Closing Date.

SPONSOR SHARE FORFEITURE AGREEMENT

  • the SPAC and the Company entered into a sponsor shares forfeiture agreement with the sponsor of the SPAC, HH&L Investment Co., pursuant to which the Sponsor has agreed to contribute or forfeit certain Class B Ordinary Shares owned by it to facilitate financing after the signing of the Business Combination Agreement and certain forfeiture arrangement with an agreed cap.
  • If at the Closing, the SPAC Closing Cash is less than $40,000,000, the Sponsor hereby agrees to forfeit to SPAC all rights, title, and interest in and to an aggregate number of the Sponsor Shares equal to 1,539,300 SPAC Class B Ordinary Shares, provided that:
    • If the Sponsor transfers, contributes or forfeits Financing Contribution Shares and the aggregate number of Forfeited Shares (without reduction) and Financing Contribution Shares exceed 2,052,400 SPAC Class B Ordinary Shares, then the number of Forfeited Shares shall be reduced to an amount equal to:
      • (i) 2,052,400 SPAC Class B Ordinary Shares minus
      • (ii) the Financing Contribution Shares actually transferred, contributed or forfeited by the Sponsor.
  • For the avoidance of doubt, if SPAC Closing Cash is equal to or more than $40,000,000, there shall be no Forfeited Shares.

NOTABLE CONDITIONS TO CLOSING

  • The obligations of the parties to consummate the Business Combination are subject to the SPAC having at least US$5,000,001 of net tangible assets remaining after redemption.

NOTABLE CONDITIONS TO TERMINATION

  • The Business Combination Agreement may be terminated by either the SPAC or DiaCarta, if the Business Combination has not been consummated by the date that is ten months (August 14, 2023) after the date of the Business Combination Agreement.
  • Or upon a Governmental Order or Law enacted by any Governmental Authority which shall have become final and non-appealable and has the effect of making the consummation of the Business Combination illegal or prohibited.

ADVISORS

  • Cohen & Company Capital Markets is serving as exclusive financial advisor and capital markets advisor to HH&L.
  • Revere Securities LLC is serving as exclusive financial advisor to DiaCarta.
  • White & Case is serving as legal advisor to HH&L.
  • Loeb & Loeb LLP is serving as legal advisors to DiaCarta.
  • Morgan, Lewis & Bockius LLP is serving as legal counsel to CCM.

MANAGEMENT & BOARD

Executive Officers

Richard Qi Li, 50
Chief Executive Officer & Director of the Board

Until his resignation in December 2020 which is expected to take effect shortly, Mr. Li had been, from 2017, the chief investment officer and, from 2019, the chief operating officer of China Great Wall AMC (International) Holdings Ltd. and, from 2018, the chief executive officer of Great Wall Pan Asia Asset Management Ltd., both subsidiaries of China Great Wall Asset Management Co. Ltd., a leading asset management company based in China. Mr. Li was previously a managing director and the head of China securities at Goldman Sachs Asia from 2013 to 2017, and worked at Deutsche Bank Hong Kong from 2003 to 2013, including as a managing director and the head of north Asia capital markets and treasury solutions. Mr. Li has also worked at Merrill Lynch, the World Bank, and the Ministry of Finance of the PRC. Mr. Li’s experience in the healthcare sector includes investments in two top-tier European healthcare businesses and WeDoctor, which is one of China’s top-tier online healthcare companies. He has also been involved in investments in the e-commerce, consumer, energy and real estate sectors in Asia and globally. Mr. Li also has experience leading several significant capital raising transactions. Mr. Li obtained a bachelor’s degree in mathematics and a master’s degree in economics from Nankai University in China and a master of business administration from Columbia Business School. He was also a visiting scholar at Harvard University in 2019.

Huanan Yang, 36
Chief Operating Officer & Director of the Board

Huanan Yang currently serves as an executive director of HOPU Investments, where he is primarily responsible for sourcing, structuring and executing late stage growth as well as buyout investment opportunities. He also shares broad portfolio management responsibilities including strategy, executive recruiting, financing, restructuring, business development and other corporate matters. Mr. Yang acts as board member and observer of several of portfolio companies of HOPU Investments. Prior to joining HOPU Investments in 2014, Mr. Yang worked in the Asia Growth Fund of The Carlyle Group in 2013, and previously served in a corporate development role at the MAERSK Group from 2009 to 2012. Mr. Yang obtained a bachelor’s degree in electrical engineering from Fudan University in China, a master’s degree of engineering from Dartmouth College and a MBA degree from Harvard Business School.

Yingjie (Christina) Zhong, 52
Chief Financial Officer

Yingjie (Christina) Zhong has significant experience in investment banking and finance. From 2008 to 2017, Ms. Zhong served as the head of China Financial Institution Group and was a managing director in the Investment Banking Department at Morgan Stanley Asia Ltd. She previously worked as an executive director in the investment Banking Department at Goldman Sachs based in Beijing from 2005 to 2008. From 2000 to 2005, Ms. Zhong was a vice president in the Investment Banking Department at China International Capital Corporation Limited. She formerly worked at the National Audit Office of The People’s Republic of China from 1990 to 1998. Ms. Zhong holds a bachelor’s degree of economics in auditing from Wuhan University in China and a master’s degree of business administration from China Europe International Business School. She is a Certified Public Accountant of China and a holder of certificates of accounting and finance from the Association of Chartered Certified Accountants. She was a visiting professor of China Capital University of Economics and Business in 2012. Ms. Zhong was also a deputy director of the 10th Beijing Economics Committee of China Democratic National Construction Association.

Board of Directors

Kenneth W. Hitchner, 60
Chairman of the Board

Mr. Hitchner began his career at Goldman Sachs in New York City, United States in 1991 in the investment banking division and became a partner in 2002. Over the course of his career at Goldman Sachs from 1991 to 2019, Mr. Hitchner held various leadership positions in creating and growing several key business units spanning industry verticals and multiple geographies. Prior to his retirement from Goldman Sachs, Mr. Hitchner served as the chairman and chief executive officer of Goldman Sachs in Asia Pacific Ex-Japan and a member of Goldman Sachs’ Global Management Committee. Mr. Hitchner was a founding member of Goldman Sachs’ healthcare banking group, which he joined in 1995. He later on served as global head of the healthcare banking group and global co-head of the technology, media and telecom Group. Following his relocation to Hong Kong in 2013, Mr. Hitchner, in his capacity as the chairman and chief executive officer of Goldman Sachs in Asia Pacific Ex-Japan, provided oversight to a number of significant transactions leveraging his extensive knowledge and experience in leading healthcare transactions, particular in the biotech sector, as well as technology related transactions. As part of his leadership role at Goldman Sachs Asia, Mr. Hitchner drove business initiatives to capitalize on new economy trends with a focus on the healthcare sector and further developed and grew Goldman Sachs’ Asia business overall. Mr. Hitchner currently serves as a board member of Shanghai-based Wuxi Biologics (Cayman) Inc. and a senior advisor to Wuxi AppTec Co., Ltd., two of China’s leading healthcare companies. Mr. Hitchner also serves as an independent director of Provident Acquisition Corp., a newly incorporated blank check company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Although Mr. Hitchner has retired from Goldman Sachs and no longer holds any management or employment position at Goldman Sachs, he has an honorary title of senior director of Goldman Sachs.

Qingjun Jin, 63
Independent Director 

Mr. Jin is currently and has been a senior partner at King & Wood Mallesons since 2002, where his practice focuses on corporate finance, capital market and bankruptcy. Mr. Jin currently serves and has served as a director of Goldstream Investment Limited since 2019, a director of Shenzhen Cheng Chung Design Co., Ltd. since 2018, a director of Shenzhen Kingkey Smart Agriculture Times Co., Ltd. since 2018, a director of Bank of Tianjin Co., Ltd. since 2017, a director of Hengqin Life Insurance Co., Ltd. since 2017, a director of Central Development Holdings Limited since 2017, a director of Sino-Ocean Group Holding Limited Since 2016, a director of Times China Holdings Limited since 2015, a director of Guotai Junan Securities Co., Ltd. since 2013 and a director of Invesco Great Wall Fund Management Co., Ltd. since 2003. Previously, Mr. Jin had served as a director of CSG Holding Co., Ltd. from 2016 to 2019, a director of Konka Group Co., Ltd. from 2015 To 2018, a director of Gemdale Corporation from 2014 to 2017, a director of Dagang Holding Group Co., Ltd. from 2015 to 2016, a director of Materwork Group Co., Ltd. from 2013 to 2016 and a director of New China Assets Management Co., Ltd. from 2010 to 2016. Mr. Jin obtained a bachelor’s degree from Anhui University in 1982 and an LL.M. degree from the Graduate School of China University of Political Science and Law in 1987. He was a research fellow at Harvard Kennedy School of Government in 2009. Before joining King & Wood Mallesons in 2002, Mr. Jin served as a lawyer in JSM Hong Kong, Clyde & Co., London and Beijing C&C law firm from 1987 to 1993, and was the founding partner of Shenzhen Shu Jin Law Firm from 1993 to 2002.

Dr. Jingwu Zhang Zang, 64
Independent Director 

Prior to founding I-Mab, Dr. Zang served as the chief scientific officer and president of Simcere Pharmaceutical Group and BioScikin Co., Ltd. from 2013 to 2016. Dr. Zang held senior management positions at GlaxoSmithKline (GSK), as the global senior vice president and head of GSK’s Research and Development in China, from 2007 to 2013. The academic career of Dr. Zang started at Dr. Willems Institute and University of Limburg in Belgium in 1990. Dr. Zang was a professor at Baylor College of Medicine in Houston from 1996 to 2002 and later joined the Chinese Academy of Sciences as the founding director of the Institute of Health Sciences and as a co-director of Institute Pasteur Shanghai, an independent nonprofit life science institute to address public health problems in China, where he served as its director from 2004 to 2006. Dr. Zang also served as a director of Shanghai Institute of Immunology from 2002 to 2007. Dr. Zang received his M.D. from Shanghai Second Medical University (now part of Shanghai Jiaotong University in China) in 1984, and his Ph.D. in neuroimmunology from the University of Brussels in Belgium in 1990. Dr. Zang conducted his post-doctoral work at Harvard Medical School in 1992, and obtained his U.S. medical license from the Texas Medical Board through a clinical residency at Baylor College of Medicine in Houston in 1999.

Professor Frederick Si Hang Ma, 68
Independent Director 

Professor Ma has significant experience in banking and financial sectors. He has served as the general manager of Ma & Associates Limited, a business advisory company, since 2010. He has served as a non-official member of the Hong Kong Government Chief Executive’s Council of Advisers on Innovation and Strategic Development since 2018, a member of the International Advisory Council of China Investment Corporation since 2009, a member of the International Advisory Council of Investcorp since 2019, and a member of the Global Advisory Council of Bank of America since 2013. Professor Ma currently also serves on the board of various companies, including as an independent non-executive director of COSCO Shipping Holdings Co., Ltd., FWD Group and Guangshen Railway Company Limited, and as a director of New Frontier Corporation. He previously worked at Chase Manhattan Bank from 1973 to 1980, Royal Bank of Canada Dominion Securities from 1980 to 1990, Kumagai Gumi (HK) Limited from 1990 to 1998, JP Morgan Chase from 1998 to 2001 and Pacific Century Cyberworks Limited from 2001 to 2002. From 2002 to 2007, he was the Secretary for Financial Services and the Treasury of Hong Kong Government. He held the post of Secretary for Commerce and Economic Development of Hong Kong Government from 2007 to 2008. Besides his corporate and government positions, Professor Ma has also taken various roles in multiple universities or educational institutions in Asia. Professor Ma has served as an Honorary Professor of the School of Economics and Finance at the University of Hong Kong since 2008, a Permanent Honourable President of Hong Kong Special Schools Council since 2011, and an Honorary Professor of the Faculty of Business Administration at the Chinese University of Hong Kong since 2013. In 2014, he was conferred the Honorary Doctor of Social Sciences by Lingnan University. In 2016, he was conferred the Honorary Doctor of Social Sciences by City University of Hong Kong. From 2017 to 2020, he was appointed as the Council Chairman of The Education University of Hong Kong. Additionally, Professor Ma has served as a Justice of the Peace since 2010 and was awarded the Gold Bauhinia Star medal in 2009. He holds a bachelor’s degree in economics and history with honors from the University of Hong Kong.

ByMatt Cianci