Lakeshore Acquisition I filed a preliminary Form S-4 outling its proposed business combination with ProSomnus Holdings, a manufacturer of medical devices for the treatment of obstructive sleep apnea. Announced last month, the deal would give the combined enterprise an implied initial enterprise value of $168 million.
Terms call for Lakeshore to acquire ProSomnus for $125 million (including the assumption of $13 million of debt to be paid off at closing). Lakeshore will issue approximately 11 million new shares to current ProSomnus stockholders (subject to net debt outstanding, at closing). Cohanzick Management and CrossingBridge Advisors are expected to lead and backstop a $30 million senior and junior convertible note investment. The parties expect to receive a minimum additional $10 million in equity from a PIPE or from Lakeshore’s trust.
Current ProSomnus stockholders may also be entitled to an earn-out of up to an additional 3 million shares in three tranches if certain trading price targets are met within three years after the deal closes.
If approved, upon closing ProSomnus stock is expected to trade on the Nasdaq under the symbol OSA.
The parties have said they expect to close the deal in the third quarter. Read more.
