MSP Recovery and Lionheart Acquisition II today announced a mega-merger that values the combined companies at $32.6B. At that valuation, the deal is one of the top 3 largest SPAC transactions ever.
The combined company would be named MSP Recovery, and common stock, existing warrants and additional warrants would trade on the Nasdaq under MSPR, LCAP W, and MSPR W, respectively.
The transaction is anticipated to generate gross proceeds of up to approximately $230 million of cash, assuming no redemptions by Lionheart’s public stockholders.
Upon completion of the business combination, approximately 1.029 billion additional warrants will be issued to former Lionheart stockholders who have not elected to redeem their shares of Lionheart common stock in connection with the merger. Each additional warrant will represent the right to purchase one share of the combined company’s common stock at $11.50 with a 5-year tenor.
No dilution is expected to result from the issuance of the additional warrants because MSP’s founders have agreed to sell to the combined company for the same value as the exercise price of a share issued pursuant to an additional warrant, one share of the combined company’s common stock (or an equivalent security, under certain circumstances) upon the exercise of the additional warrants. As a result, on a net basis, following the repurchase of the applicable securities from the MSP founders, there is anticipated to be no increase in the number of outstanding shares as a result of the exercise of the additional warrants.
MSP Recovery specializes in recovering improper payments for Medicare and commercial providers. MSP is currently pursuing the more than $50 billion it owns in billed amounts against insurance companies that have primary payment responsibility as well as medical and pharmaceutical manufacturers that either caused the expenditure of medical treatment or inflated their prices against the law. MSP’s $50 billion in billed amounts is projected to grow to $263 billion, the companies said in a joint statement. Read more.
