In the pre-market session today, shares of Virgin Group-backed special purpose acquisition company (SPAC) VG Acquisition Corp (VGAC) stood among the top gainers with a +20.35% rise.
Why Stock Trading Higher
In order to carry out a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more enterprises, VG Acquisition Corp. was formed by Sir Richard Branson, the company’s founder, and a renowned global entrepreneur. Branson is also the founder of the Virgin Group as well as part of the group’s management team.
VGAC, in a short period of a month, has succeeded to achieve its merger target as today it entered into a definitive merger agreement with leading consumer genetics and research company 23andMe, Inc. In their joint statement, the companies confirmed that VGAC will change its New York Stock Exchange (NYSE) ticker symbol upon conclusion of the deal, expected in the second calendar quarter of 2021, and the shares of the merged entity will list under the ticker symbol ‘ME.’
Through a combination of stock and cash funding, the firms will merge. 23andMe values the business combination at an enterprise value of approximately $3.5 billion. Through the contribution of up to $509 million in cash held in VG Acquisition Corp.’s trust account and a concurrent $250 million private placement (PIPE) of common stock, priced at $10.00 per share, the transaction is expected to deliver up to $759 million of gross proceeds. The Virgin Group’s founder, Sir Richard Branson, and 23andMe’s CEO and co-founder, Anne Wojcicki, are each investing $25 million in PIPE. Leading institutional investors, including funds under the management of Fidelity Management & Research Company LLC, Altimeter Capital, Casdin Capital, and Foresite Capital, will join them.
In early trading in the regular session as of 09:38 a.m. EST, VG Acquisition Corp (VGAC) shares were buoying at $15.02 with a rise of +11.47%.