Jaws Acquisition Corporation

Jaws Acquisition Corporation

Oct 19, 2020 by Roman Developer


ENTERPRISE VALUE: $4.4 billion

Cano Health, LLC, a leading value-based care delivery platform for seniors, and Jaws Acquisition Corp., a special purpose acquisition company, announced today they have entered into a definitive merger agreement. Upon completion of the transaction, the combined company will operate as Cano Health, and will be listed on the New York Stock Exchange (NYSE) under the new ticker symbol “CANO.

Founded in 2009, Cano Health provides value-based care for more than 103,000 members through its network of 564 primary care physicians across 14 markets in FloridaTexasNevada and Puerto Rico. The Company focuses on providing high-touch population health and wellness services to Medicare Advantage members, particularly in underserved communities where it can make the greatest impact. Cano Health’s proprietary CanoPanorama technology platform enables the delivery of high-quality health care services to its members, resulting in superior clinical outcomes at lower costs. Cano Health partners with leading health plans, including Humana, UnitedHealthcare, Anthem, Aetna, Centene and Devoted, to improve health outcomes and member experience.

The Company has executed on a multi-pronged strategy of organic growth through existing centers, de novo clinics, and MSO affiliate practices, as well as growth through acquisitions to drive a historical revenue compound annual growth rate of over 70% since 2017. In addition, Cano Health was selected to participate as a Direct Contracting Entity by the Centers for Medicare and Medicaid Services (CMS) under the “American Choice Healthcare, LLC” brand that is scheduled to commence in April 2021 and has the potential to significantly expand the Company’s addressable market.

The transaction will further accelerate Cano Health’s growth and enable the expansion of its value-based care into new geographies. The Company is expected to receive up to $935 million in transaction proceeds to pay down debt and provide growth capital, and a substantial majority of up to $465 million of proceeds is expected to be allocated to Cano Health’s financial sponsor.


  • Cano Health, Inc. has initiated a financial restructuring through a Restructuring Support Agreement with the majority of its lenders, aiming to significantly reduce its debt and secure $150 million in new financing to support operations.
    • This strategic move, part of a prearranged Chapter 11 process, is designed to accelerate the company’s transformation plan, focusing on core businesses and expecting to achieve $290 million in annualized cost reductions by end of 2024.
    • CEO Mark Kent emphasizes the restructuring will enable Cano Health to continue delivering high-quality care while exploring strategic partnerships and potential sale options to maximize stakeholder value, with plans to emerge from the process in the second quarter of 2024.


The transaction values the combined company at an enterprise value of approximately $4.4 billion and implies a multiple of 3.1x estimated 2021 revenues of $1.45 billion. The business combination is expected to deliver up to $1.49 billion of gross proceeds, including the contribution of up to $690 million of cash held in Jaws Acquisition Corp.’s trust account and an $800 million concurrent private placement (PIPE) of common stock of the combined company, priced at $10.00 per share. Existing Cano Health shareholders will roll over approximately 90% of their equity stake into the new company.

Assuming no public shareholders of Jaws Acquisition Corp. exercise their redemption rights and after $465 million in cash consideration to Cano Health’s existing shareholders, Cano Health shareholders will own approximately 65%, Jaws Acquisition Corp. shareholders will own approximately 15%, PIPE investors will own approximately 17% and Jaws’ sponsor will own approximately 4% of the issued and outstanding shares of common stock, respectively, of the combined company at closing. Furthermore, the combined company will be capitalized with up to $535 million in cash, including proceeds received from the transaction and after paydown of approximately $400 million in debt.

The transaction, which has been unanimously approved by Cano Health and Jaws Acquisition Corp., is subject to approval by Jaws Acquisition Corp.’s shareholders and other customary closing conditions. The transaction is expected to close at the end of the first quarter or the beginning of the second quarter of 2021.


  • The PIPE includes $50 million from Barry Sternlicht and the remainder from leading institutional investors, including funds affiliated with Fidelity Management & Research Company, funds and accounts managed by BlackRock, Third Point and Maverick Capital
  • Gross proceeds from PIPE of $800,000,000, priced at $10.00 per share.
  • In addition, the Seller may, prior to the Closing and subject to the prior consent of JAWS and Cano America, LLC, direct JAWS to sell up to an additional 20,000,000 shares of JAWS’s Class A common stock


  • Cash in trust plus PIPE financing must be no less than $1,025,000,000 at the Closing; and Trust Account Proceeds must equal no less than $225,000,000 at the Closing


  • Eitiher party can terminate If the Closing has not occurred by June 11, 2021, which date shall be automatically extended to no later than July 11, 2021 if the SEC has not declared the Registration Statement (as defined in the Business Combination Agreement) effective on or prior to June 11, 2021


  • Moelis & Company is acting as financial advisor to Cano Health.
  • Credit Suisse is serving as financial advisor and exclusive capital markets advisor to Cano Health. Credit Suisse is also serving as exclusive placement agent on the private offering.
  • Goodwin Procter LLP is serving as legal counsel to Cano Health and Cravath Swaine & Moore LLP is serving as counsel to certain shareholders, including members of Company management.
  • Kirkland & Ellis LLP is serving as legal counsel to Jaws Acquisition Corp.


Executive Officers

Joseph L. Dowling, 55
Chief Executive Officer

Mr. Dowling also currently serves as the Chief Executive Officer of Brown University’s endowment after serving as Chief Investment Officer from 2013 to 2018. He is responsible for the University’s $4.1 billion endowment and a 21-member investment office. Mr. Dowling also served as the interim Chief Financial Officer of Brown University overseeing the University’s $1.2 billion budget from June 2019 until January 2020 in addition to holding his endowment position. At the endowment, Mr. Dowling oversees asset allocation, manager selection and direct investments. Brown University’s endowment is allocated across a wide variety of asset classes spanning public and private equity to other alternative asset classes, including traditional absolute return strategies and real assets. The Brown endowment has had outstanding results under Mr. Dowling’s stewardship. Pursuant to data compiled by Cambridge Associates, as of October 21, 2019, the Brown endowment delivered performance in the top quartile of college and university endowments during Mr. Dowling’s tenure. In addition, the endowment’s trailing 5-year risk-adjusted return (as measured by the Sharpe ratio) ranks in the top 5% of the data compiled by Cambridge Associates. Mr. Sternlicht also served on the university’s investment committee from 2013 to 2019. Prior to joining Brown University’s endowment, Mr. Dowling was the Founder and Chief Executive Officer of Narragansett Asset Management LLC. From its formation in 1998 through 2006, Narragansett managed funds for institutions, pension funds and endowments. From 2006 to 2013, Narragansett managed Mr. Dowling’s personal capital. Mr. Dowling is an Advisory Board Member of Jaws Estates Capital, the family office of Barry S. Sternlicht and an affiliate of our Sponsor, and the Harbor Funds, a Director of Third Point Reinsurance Ltd and Director of Integrated Electrical Services, Inc. Other prior work experience includes the First Boston Corporation, Tudor Investments and Oracle Partners, L.P.

Michael Racich, 48
Chief Financial Officer

Since 2010, Mr. Racich has also served as the Chief Financial officer of Jaws Estates Capital LLC, the family office of Barry S. Sternlicht, our Chairman. Previously, Mr. Racich was a director at Frydland Stevens LLC from 2007 to 2014 and also worked for Jaws Estates Capital LLC from 2005 to 2007. While at Frydland Stevens LLC, Mr. Racich advised Jaws Estates Capital LLC on tax related issues and was responsible for preparing Jaws Estates Capital LLC’s tax filings. Mr. Racich graduated from Villanova University in 1994 with a Bachelor of Science in Accountancy.


Board of Directors

Barry S. Sternlicht, 59

Mr. Sternlicht is a well-known entrepreneur and operator with an extensive deal-making history. He founded Starwood Capital in 1991, serving as Chairman and Chief Executive Officer. Starwood Capital is a private alternative investment firm focused on global real estate, hotel management, oil and gas and energy infrastructure with over $60 billion of assets under management as of March 31, 2020. Through the Starwood Capital platform, Mr. Sternlicht has created several multi-billion public market companies, ranging from traditional real estate to branded hospitality.

Throughout Mr. Sternlicht’s career, he has focused on capitalizing on emerging consumer trends; either directly via core operating assets or indirectly through Starwood Capital’s real estate portfolio. He has also executed several marquee public market transactions to enhance the scale of his core platform – including the creation and expansion of Starwood Property Trust (NYSE: STWD), the consolidation of Starwood Hotels & Resorts Worldwide (formerly NYSE: HOT), the spin-off and growth of Invitation Homes (NYSE: INVH) and the formation of Equity Residential (NYSE: EQR). Similarly, he has been involved in numerous private market consumer businesses as an early investor.

Mr. Sternlicht currently serves as the Chairman and Chief Executive Officer of STWD, a leading, diversified real estate finance company with over $3 billion in market capitalization; and one of the first mortgage REITs launched post-crisis. Since inception in 2009, Mr. Sternlicht guided STWD through a steady evolution with over $61 billion in deployed capital, evolving from a pure-play commercial lender to a diversified commercial REIT with residential lending, commercial mortgage servicing, property ownership and infrastructure lending.

Mr. Sternlicht also has deep operating expertise, serving as the Chairman, from January 1995 through May 2005, and as the Chief Executive Officer, from January 1995 through September 2004, of HOT; a period in which the share price appreciated at a compound annual growth rate of 16%. Over his tenure as Chief Executive Officer, he grew the total market capitalization of HOT to approximately $10 billion. As Chief Executive Officer, Mr. Sternlicht executed several key acquisitions, including Westin Hotels, Patriot American and ITT Corp., and led the development of the W Hotel concept.

Outside of his public market experience, Mr. Sternlicht has made a variety of investments in the consumer sector. Most notably, he has acquired or founded a number of independent hotel chains, including Baccarat Hotels, 1 Hotels and Treehouse Hotels, which are operated by SH Hotels & Resorts, a hotel brand management company and an affiliate of Starwood Capital. In addition to these investments, Mr. Sternlicht has invested in various consumer facing companies, including ThirdLove, a women’s clothing brand, Lytro, a developer of light-field cameras, and Lyric, a hospitality platform for business travelers.

Douglas I. Ostrover, 57
Director Nominee

He is the Co-Founder of Owl Rock Capital Partners LP (“Owl Rock Capital Partners”) and also serves as Chief Executive Officer and Co-Chief Investment Officer of Owl Rock Capital Advisors LLC (the “Adviser”), Owl Rock Technology Advisors LLC (“ORTA”) and Owl Rock Capital Private Fund Advisors LLC (“OPRFA,” and together with the Adviser, ORTA and Owl Rock Capital Partners, “Owl Rock”), and is a member of the Investment Committee of each of Owl Rock Capital Corporation, Owl Rock Capital Corporation II and Owl Rock Technology Finance Corp. In addition, Mr. Ostrover has served on the boards of Owl Rock Capital Corporation and Owl Rock Capital Corporation II since 2016, on the board of Owl Rock Technology Finance Corp. since 2018 and on the board of Owl Rock Capital Corporation III since 2020. Prior to co-founding Owl Rock, Mr. Ostrover was one of the founders of GSO Capital Partners (“GSO”), Blackstone’s alternative credit platform, and a Senior Managing Director at Blackstone until 2015. Prior to co-founding GSO in 2005, Mr. Ostrover was a Managing Director and Chairman of the Leveraged Finance Group of Credit Suisse First Boston (“CSFB”). Prior to his role as Chairman, Mr. Ostrover was Global Co-Head of CSFB’s Leveraged Finance Group, during which time he was responsible for all of CSFB’s origination, distribution and trading activities relating to high yield securities, leveraged loans, high yield credit derivatives and distressed securities. Mr. Ostrover was a member of CSFB’s Management Council and the Fixed Income Operating Committee. Mr. Ostrover joined CSFB in November 2000 when CSFB acquired Donaldson, Lufkin & Jenrette (“DLJ”), where he was a Managing Director in charge of High Yield and Distressed Sales, Trading and Research. Mr. Ostrover had been a member of DLJ’s high yield team since he joined the firm in 1992. Mr. Ostrover is actively involved in non-profit organizations including serving on the board of directors of the Michael J. Fox Foundation. Mr. Ostrover is also a board member of the Brunswick School. Mr. Ostrover received a B.A. in Economics from the University of Pennsylvania and an M.B.A. from New York University Stern School of Business.

Michael Baldock, 56
Director Nominee

Since February 2020, Mr. Baldock has also served as the Chief Financial Officer and a director of Abcam plc, a life science tools company. From November 2008 to February 2020, Mr. Baldock was a founding partner at Ondra Partners, an independent financial advisory firm. Prior to that, from 2004 to 2007, he was a Managing Director, Global Head of Healthcare and Head of Investment Banking, Americas for HSBC, a global universal bank. From 2000 to 2004, he was a Partner of Lazard Freres & Co LLC, a financial advisory and asset management firm. Mr. Baldock received an A.B. in Social Studies from Harvard College.

Benjamin Weprin, 41
Director Nominee

In October 2008, Mr. Weprin founded AJ Capital Partners, a private real estate company based in Chicago, Illinois, and has served as the Chief Executive Officer since. AJ Capital Partners acquires, develops and operates hospitality assets and businesses with a focus on luxury lodging investments. Mr. Weprin also founded Adventurous Journeys LP in 2008 and has served as its Chief Executive Officer since. He is also the founder of Graduate Hotels and has served as its Chief Executive Officer since its creation in 2014. Mr. Weprin received an M.B.A from Northwestern University Kellogg School of Management and a B.A. in Business Administration from University of Tennessee-Knoxville.