Healthwell Acquisition I called an Oct. 19 meeting for shareholders to vote on a proposed merger with clinical-stage biotechnology company Starton Therapeutics. As announced in April, the deal has a post-transaction enterprise value of $339 million.
Terms call for a newly formed HWEL Holdings, as a subsidiary of Healthwell, to acquire Starton and become publicly traded.
If approved, upon closing Starton Holdings would list on the Nasdaq. The SPAC will exchange stock and warrants on a one-for-one basis for shares of the new company.
Starton develops drug delivery systems primarily for use in cancer therapies.
Deal terms call for a base consideration of $260 million, including $20 million of incentive shares provided to potential PIPE investors, subject to adjustments for debt (net of cash) and other adjustments.
In addition to the base consideration, existing Starton shareholders will have the right to receive contingent earnout consideration in the form of up to 25 million shares of the combined company’s stock payable in three tranches triggered as the company hits certain milestones.
Assuming the SPAC’s share price of $10.15 and redemptions of 86%, Starton would have a pro forma enterprise value of $339 million and equity value of $374 million, according to the deal announcement. Read more.
