Casdin Capital and Corvex Management are the latest serial blank-check sponsors.
The two hedge fund firms filed plans for their third special purpose acquisition company, or SPAC, just two days after pricing their second one and a little over two weeks after their first blank-check company announced a merger partner. The third SPAC, CM Life Sciences III, is planning to raise at least $400 million in an initial public offering, according to its regulatory filing made late Wednesday.
The SPAC said in its filing sponsors that Casdin and Corvex have also agreed to invest as much as $150 million, at the targeted IPO price of $10 a share, when CM Life Sciences closes a merger.
Both CM Life Sciences II — which earlier this week raised $240 million from an upsized IPO — and CM Life Sciences III are seeking to merge with a company in three areas of the life science industry: life science tools, synthetic biology, and diagnostics fields, according to their regulatory filings.
“While certain enabling life sciences company’s products get embedded early and have long lucrative life cycles with high profitability, the industry, by and large, remains fragmented, with most companies under-resourced and under-scaled,” the latest SPAC said in its IPO document. “CM Life Sciences III will offer significant and under-appreciated opportunities to consolidate these strong but fledgling companies, a common strategy in every major industry but one possible only now that the life sciences industry has ripened.”
The first SPAC sponsored by Casdin and Corvex, CM Life Sciences, announced February 10 that it agreed to merge with Sema4, an artificial intelligence-driven, patient-centered genomic and clinical data intelligence company. The deal, which values Sema4 at $2 billion, is expected to close during the second quarter, according to the announcement
Under the deal, Casdin, Corvex and a number of other investors committed to a $350 million PIPE, or private investment in public equity. Two of the additional investors are also hedge fund firms: life sciences specialist Perceptive Advisors and Tiger Cub Viking Global Investors, whose hybrid fund has made a large number of investments in health-care companies.
Shares of CM Life Sciences closed Wednesday at $20.10, more than double its IPO price.
As with the two previous SPACs, Eli Casdin will serve as chief executive officer of CM Life Sciences III. He founded Casdin Capital in 2011.
In the 12 months through January, Casdin made 44 new investments in private companies and participated in 36 secondary offerings of companies in which it previously invested, according to its IPO filing. In addition, 13 of Casdin’s portfolio companies completed IPOs during that time period.
Institutional Investor recently reported Casdin’s hedge fund was up 110 percent in 2020, according to an investor in the fund.
Keith Meister, who serves as chairman of the SPACs, founded Corvex Management in December 2010. His firm, which manages $2.5 billion, is known for its activism and does not specialize in health care. Meister previously worked for Carl Icahn in various capacities from 2003 to 2010.
