SOC Telemed, a telemedicine company formerly known as Specialists On Call, on Wednesday announced plans to merge with public investment company Healthcare Merger Corp.
The proposed business combination is expected to close in the fourth quarter. The new company will operate under the name SOC Telemed and be listed on the Nasdaq.
Healthcare Merger Corp., a special purpose acquisition company, began trading on the Nasdaq in December. It was formed last year to pursue mergers, asset acquisitions and other combinations with healthcare businesses, and is partially sponsored by investment banking firm MTS Health Partners.
The companies peg SOC Telemed's initial enterprise value at an estimated $720 million.
Investors including BlackRock, Baron Capital Group and ClearBridge Investments have committed to a private investment of $165 million in the combined company's common stock, which will close with the merger.
SOC Telemed's current management and equity holders—including its majority equity holder, private equity firm Warburg Pincus—will shift a portion of their equity into the combined company.
After the merger, the companies expect SOC Telemed's current equity holders to own 40% of shares of common stock in the combined company; Healthcare Merger Corp. will own 32%; private investment in public equity, or PIPE, investors will own 21%; and Healthcare Merger Corp.'s sponsor will own 7%.
Warburg Pincus will remain the combined company's largest shareholder.
Hospitals, post-acute facilities and physician networks purchase SOC Telemed's telemedicine products to connect their on-site care teams with remote specialists. The company provides services to 847 facilities, including 543 acute-care hospitals.
"SOC operates a scaled and differentiated acute care telemedicine platform," Steve Shulman, Healthcare Merger Corp.'s CEO, said in a statement. "This transaction will enable the company to capitalize on substantial opportunities to expand and grow and benefit from the accelerated adoption of telemedicine as a result of COVID-19."
Shulman will become chairman of the combined company's board of directors.
The provider market has been a growing area of focus for telemedicine companies. Teladoc Health, a telemedicine giant that works with hospitals, insurers and employers, as well as direct to consumer, earlier this month completed its acquisition of InTouch Health, a telemedicine company that primarily serves providers.
