• SOC Telemed, a former healthcare consulting firm, formerly known as Healthcare Merger Corp, has used it for reception and publication.
• The deal, valued at approximately $ 720 million by SOC Telemed in Reston, Virginia, is expected to close in the fourth quarter of this year. The company resulting from the merger will operate under the name SOC Telemed and will be listed on Nasdaq.
• Healthcare Merger Corp. is a special purpose vehicle partially backed by private equity firm Shulman Ventures. In fact, the Shell Company raised $ 250 million in cash in an IPO in December 2019.
Businesses can turn to these blank control companies to go public and provide guaranteed access to capital in place of a traditional initial public offering, although many blank check IPOs on the market have underperformed in the past.
Under the SOC agreement, BlackRock, Baron Capital Group, and ClearBridge Investments, among others, have committed to investing $ 165 million in common stock in the merged company.
SOC management and shareholders, including private equity giant Warburg Pincus, SOC’s current majority shareholder, will transfer some equity to SOC to help the company pay off existing debt, take over some shareholders, and balance the balance sheet to strengthen it.
The companies expect current SOC shareholders to own 40% of the company, Healthcare Merger Corp. shareholders 32%, Public-Private Equity (PIPE) investors 21%, and Healthcare Merger Corp. sponsor 7 %.
Warburg Pincus remains the main shareholder.
SOC leaders will also experience a shakeup as part of the deal. Acting CEO Paul Ricci will step down as CEO and will be replaced by John Kalix, the current president of SOC.
Steve Shulman, CEO of Healthcare Merger Corp., becomes Chairman of the SOC Board. Shulman also serves on the boards of the VillageMD, a network of general practitioners, and Magellan Health, a managed care company.
SOC telemedicine is mainly used in hospitals to support medical professionals on-site through a software platform, IT team, and network of real-time clinical specialists with professional care. It is used in nearly 850 healthcare locations, including 543 acute care hospitals in 47 states, including 19 of the 25 largest healthcare systems in the US, and more than a million acute trials have been conducted.
SOC reported reserves of $ 5.7 million in the first half of 2020, a record for the company. SOC posted sales of $ 66.2 million last year and expects revenue of $ 57.3 million this year.
The provider market is a rapidly growing area of interest for telemedicine companies and has a significant untapped customer base as hospitals seek to invest in virtual care during the COVID pandemic. 19. According to a June study by EY Parthenon, approximately 90% of healthcare systems plan to increase their telemedicine spending on physician-to-physician acute care over the next 12 to 18 months.
However, SOC faces significant competition as large providers such as Teladoc and Amwell are increasingly interested in acute telemedicine and pursuing both organic and inorganic growth. There are already a variety of solutions appreciated by small medical practices like Doxy. The EHR providers and I are our own platforms.