Genetic drift

4 February 2021 By Robert Cyran Follow @rob_cyran

The consumer genetics company is combining with the British billionaire’s SPAC in a $3.5 bln deal. Revenue from testing is shrinking, but all that personal data could be valuable. While 23andMe’s valuation looks high, the $1 bln in cash should buy some time to grow into it.

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Consumer genetic testing company 23andMe said on Feb. 4 it had agreed to go public in a deal with blank-check firm backed by Virgin Group founder Richard Branson. The deal valued the combined firm at an enterprise value of $3.5 billion.

VG Acquisition will inject $509 million in cash as part of the deal. In addition, 23andMe will issue $250 million of new stock privately, including $25 million each to Branson and co-founder and Chief Executive Anne Wojcicki.

At closing, the company would have an estimated equity value of $4.4 billion and nearly $1 billion of cash.

Existing 23andMe investors will own 81% of the equity, shareholders in VG Acquisition will own 11%, the private placement investors 6% and VG Acquisition sponsors 2%.

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