BioTech

23andMe to Become Public Company Through Merger Deal With VG Acquisition
23andMe, a consumer genetics and research company, will merge with VG Acquisition (VGAC), a special purpose acquisition company sponsored by Virgin Group, through a combination of stock and cash financing to become a public company, the companies said Thursday.

The merger, valuing 23andMe at an enterprise value of about $3.5 billion, will provide the capital to fund the company's key growth initiatives across consumer health and therapeutics businesses. Current shareholders of 23andMe will own 81% of the combined company, according to a joint statement.

Shares of VG were more than 15% higher in afternoon trading.

VG will change its ticker on the New York Stock Exchange and the combined company will trade under the ticker ME upon the completion of the deal.

The transaction is expected to close in the second quarter, subject to VG shareholder approval and other customary closing conditions. The boards of each company have unanimously approved the deal.

The deal may deliver gross proceeds of up to $759 million through the contribution of up to $509 million of cash held in VG's trust account and a concurrent private placement of $250 million priced at $10 per share, including a total of $50 million investment from Virgin Group founder Richard Branson and 23andMe Chief Executive Officer Anne Wojcicki.