Forgoing the traditional IPO: Bain’s Cerevel; Vet care sees big cross-border splash for Imperial’s VetStrategy

SPACs are more than the flavor of the month--they're here to stay.

Happy Thursday!

2020 is far from traditional. Why wait for Labor Day to launch a sale process? Healthcare companies are hitting the market, deals are getting done. What pandemic?!

In noteworthy activity this week, I learned that Berkshire Partners in a deal valued just north of CAD$1.4 billion ($1 billion) won the quietly and quickly conducted auction for Imperial Capital’s VetStrategy. That while the US-Canadian borders have been shut down since March 21, and continue to be. Read more.

And more on SPACs

I’ve talked to many sources lately who say SPACs are more than the flavor of the month (or last several). Blank-check companies are here to stay. One reason: the pools of money in these vehicles are not so “blind” anymore.

“It’s not just a blind SPAC now; the SPAC is being sponsored by a fund that has built a reputation,” Adam Koppel, managing director of Bain Capital Life Sciences, told me in a recent interview. “You get a ready-made, really good syndicate of investors. It’s the investors you would want anyway.”

A week ago Bain’s Cerevel announced plans to merge with a Perceptive Advisors-sponsored SPAC concurrent with a PIPE investment from a group of investors. The combination is set to raise $425 million.

Cerevel, which develops treatments for central nervous system disorders such as Parkinson’s disease, marks the first-ever SPAC merger executed by a Bain Capital Life Sciences company.

Also unique in the universe of life sciences, Bain determined the SPAC model offered a lot more efficiency among other advantages. This way, Cerevel’s crossover investment (final round of pre-IPO financing) was essentially converted into a PIPE investment – combining two transactions into one.

There also some perks when it comes to SEC filings in a SPAC transaction vs. a traditional IPO. “Here you can spend as much time as you would want with prospective investors,” Koppel said.

Check out my full story for more behind the scenes of Cerevel’s SPAC merger.

Top Scoops
New on the block: 1-800 Contacts, the online retailer of contact lenses, kicked off a sale process. AEA, representing 1-800 Contacts’ fourth owner since 2007, bought a majority stake in 2015 from Thomas H. Lee in a $1 billion-plus deal. Check out my story.

Elsewhere, Martis Capital is seeking a buyer for Care Hospice, a provider of end-of-life care, I learned. Read more.

New venture: Waud Capital Partners has joined forces with seasoned healthcare executive Paul Jardina in a pledge to find and build out a new platform in the medication-based services industry.

“We’re focused on areas that have seen a lot of investment activity as well as certain areas of the physician practice management (PPM) world that haven’t seen as much,” Waud’s Chris Graber told me. Read more on the partnership’s plans.

Done deal: Clinical Ink this week clinched an investment from GI Partners, with existing investor NovaQuest staying on as a minority shareholder in the eClinical company. In June, one source said the company is likely to fetch a more than 20x EBITDA multiple, while a second placed price expectations in the $140 million to $150 million range. Any idea where value panned out?

That’s it for me. As always, reach me at springle@buyoutsinsider.com with your tips, feedback, or just to say hello.