23andMe – Going Public through a SPAC Merger

23andMe – Going Public through a SPAC Merger
Case Code: FINC204
Case Length: 11 Pages
Period: 2020-21
Pub Date: 2023
Teaching Note: Available
Price: Rs.200
Organization: 23andMe Holding Co
Industry: Healthcare and Services
Countries: United States
Themes: Capital Markets & Investments, Stock Market
23andMe – Going Public through a SPAC Merger
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

US-based Genetic Testing company 23andMe Inc. (23andMe), popular for its gene testing kits, was listed on the NASDAQ in June 2021. The company opted to list through a Special Purpose Acquisition Company (SPAC), owned by British entrepreneur and businessman Richard Branson of the Virgin Group.

Virgin Group, which had prior experience in listing through SPACs, had created a publicly traded buyout company Virgin Group Acquisition Corp (VGAC), and was on the lookout for the right target company.

23andME fitted the bill due to the growth opportunities it presented. 23andMe merged with VGAC in a deal which valued 23andMe at US$ 3.5 billion. The merged entity called 23andMe Holding Co was listed on the NASDAQ Global Select Market under the ticker ME.

The case describes the SPAC in detail, the difference between listing through an IPO and SPAC merger, and the pros and cons of SPAC. It discusses whether SPAC is here to stay and will replace IPO as the most preferred route for companies to get listed.

Issues

The case is structured to achieve the following teaching objectives:

  • Understand what SPAC is.
  • Examine different stakeholders in SPAC.
  • Illustrate the steps involved in setting up a SPAC and going public.
  • Compare SPAC with Traditional IPO.

Contents

Keywords

23andMe Inc; Special Purpose Acquisition Company; Initial Public Offerings; Virgin Group Acquisition Corporation; 23andMe Holding Co; Private Investment in Public Equity (PIPE); Securities Exchange Commission; Genetic Testing company; Therapeutic; Virgin Group; shell company; listing; alternative to IPO; sponsor; underwriter;

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