Ambulnz, a provider of mobile medical services and patient transportation, recently announced plans to go public through a merger with Motion Acquisition Group, a special purpose acquisition company (SPAC). After closing the transaction, “Ambulnz” will become “DocGo” and will offer integrated, digital-first medical mobility services with on-demand service response and enhanced transparency through real-time vehicle location.
One noteworthy aspect of the transition, beyond the fact that the combined company will be valued at about $1.1 billion, is it’s among a growing number of health care deals financed through SPACs. These public “shell companies” are designed to raise enough money to acquire a private company and secure a reverse merger. After the funds are raised, the SPAC must complete the acquisition within two years or the funds go back to investors. SPACs enable startups to go public much faster than the traditional initial public-offering process. And all indications are that SPACs, once an anomaly in health care, are on the rise.
CB Insights, a company that provides market intelligence on private companies and investor activities, reports that SPACs also offer greater profit opportunities for investors who can buy shares at a discount through warrants. When COVID-19 created uncertainty in public markets last year, the number of SPACs surged. Marissa Schlueter, CB Insights senior intelligence analyst, told Fierce Healthcare that as of Feb. 25, there were seven digital health SPACs — equal to the number seen in all of 2020.