Stirling-based diagnostics firm set for $5 billion merger

Diagnostics testing company LumiraDx has agreed to merge with healthcare-focused investment firm CA Healthcare Acquisition (CAHC), raising $115m in its initial public offering (IPO).

The combination reflects a value of $5bn for Lumira’s existing equity, before giving effect to the transaction.

All current LumiraDx shareholders will retain their existing holdings in the combined company.

The additional capital from the CAHC’s cash held in trust, after any redemptions, together with the new financing commitments and cash from operations, will support increasing production, continued research and development, as well as commercial and manufacturing expansion.

Since its founding, LumiraDx has raised $700 million in equity capital, including investments by Morningside Ventures, UBoston Capital Corporation, The Bill & Melinda Gates Foundation and Petrichor Healthcare Capital Management.

This week, it has secured two new financing commitments totalling $400m.

BioPharma Credit and its subsidiaries provided a $300m loan to LumiraDx, while Capital One, National Association provided a commitment letter for up to $100m on an asset-based revolving credit facility.

Last month, the company announced a £78m investment in its current Scottish operations, with 510 new posts located at sites across Stirling, Inverness and a new facility under construction at Eurocentral, near Glasgow.

It has now completed a new lease for the remaining two floors of its site at Maxim Park, giving it an additional 30,000 sq ft, after initially leasing the ground and first floors.

LumiraDx is headquartered in the UK, with research and manufacturing centres in Scotland, England and the US. The company has more than 1,200 employees across 17 countries.

It has developed a high sensitivity antigen test for Covid-19, which is currently being used by the NHS and Boots in the UK, CVS Health in the US, many accident and emergency rooms across Europe, and is being deployed in partnership with the Bill and Melinda Gates Foundation in a growing number of African countries where access to laboratory diagnostics is limited.

“LumiraDx is at the tipping point of driving a transformation in diagnostic testing – this new public recognition will solidify our already growing presence in the point of care testing market,” said chairman and chief executive Ron Zwanziger.

“Covid-19 has validated the performance of our platform and enabled us to partner with governments, health systems, retail chains and other customers to expand testing across community care settings both in high and low-and middle-income countries.”

Larry Neiterman, chairman and chief executive of CAHC, commented: “LumiraDx has a clear strategy for addressing the large and under-penetrated testing market to increase next-generation point-of-care market share.”

Zwanziger and his management team will continue to lead LumiraDx post-transaction.

He and a core group of executives founded LumiraDx in 2014 after previously founding and growing a number of diagnostic companies that were then sold to global healthcare companies for an aggregate consideration of more than $10bn.

These include Alere, the industry’s largest point-of-care testing business, which was sold to Abbott in 2017. Insider