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23andMe to Go Public Through Merger With Virgin Group Acquisition Firm

NEW YORK – 23andMe said on Thursday that it has signed an agreement to merge with VG Acquisition Corp., a special-purpose acquisition company sponsored by Virgin Group, with the ultimate purpose of becoming publicly traded through Virgin Acquisition's position on the New York Stock Exchange.

Once the transaction is complete, which the partners are estimating will occur in the second quarter, VGAC will change its NYSE ticker symbol and the combined company's shares will trade under the ticker symbol ME.

The merger places 23andMe's enterprise value at approximately $3.5 billion, the company said. The transaction is expected to deliver up to $759 million of gross proceeds through the contribution of up to $509 million of cash held in VG Acquisition's trust account and a concurrent $250 million private placement of common stock, priced at $10 per share. Virgin Group Founder Sir Richard Branson and 23andMe Cofounder Anne Wojcicki are each investing $25 million in the placement, and will be joined by leading institutional investors, including funds managed by Fidelity Management & Research, Altimeter Capital, Casdin Capital, and Foresite Capital.

As part of the transaction, 23andMe's existing equity holders will roll 100 percent of their equity into the combined company, and current shareholders of 23andMe are expected to maintain 81 percent proforma ownership of the combined company, the firm said. Assuming no public shareholders of VG Acquisition exercise their redemption rights, 23andMe will be capitalized with up to $984 million in cash to fund operations and support new and existing growth initiatives, the partners added. The deal has already been unanimously approved by the boards of both 23andMe and VG Acquisition, and is now subject to approval by VG Acquisition's shareholders.

Citi is serving as lead financial advisor, capital markets advisor, and placement agent to 23andMe. Morgan, Lewis & Bockius is serving as legal counsel.

Credit Suisse acted as lead financial advisor, capital markets advisor, and placement agent to VG Acquisition. LionTree Advisors acted as financial advisor, and Davis Polk & Wardwell is serving as legal counsel.

"We are thrilled to partner with Sir Richard Branson and VG Acquisition Corp. as we approach the next phase of our business, which will create new opportunities to revolutionize personalized healthcare and medicine," Wojcicki said in statement, noting Branson's early investment in 23andMe. "We have always believed that healthcare needs to be driven by the consumer, and we have a huge opportunity to help personalize the entire experience at scale, allowing individuals to be more proactive about their health and wellness."

Virgin Acquisition's shares rose more than 12 percent to $15.13 in Thursday morning trading on the NYSE.

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