The co-founder and former co-CEO of insurer Oscar Health has identified a provider to take public through the special purpose acquisition company he leads.
American Oncology Network plans to go public through a combination with Digital Transformation Opportunities Corp., a blank-check company formed in early 2021 by CEO Kevin Nazemi and other executives in the healthcare and tech industries.
The oncology provider will be the second of its kind to be publicly traded on NASDAQ as a result of combining with a SPAC. The Oncology Institute was the first cancer specialist to hit the stock market in November 2021 following its merger with blank-check company DFP Healthcare Acquisitions Corp.
The American Oncology Network deal, expected to close in the first half of 2023, values the combined company at $500 million. American Oncology Network’s senior leadership team will continue to guide the company following the completed transaction.
“We are excited to use the growth capital and partnership with the DTOC team to continue investing in technology and services that will support our physician partners and enhance the value proposition of AON,” American Oncology Network CEO Todd Schonherz said in a news release.
SPAC mergers were a popular means for private companies to go public because a company only had to convince the shell company of its worth, not a broader audience of potential investors. Deals soared in 2020 before slowing this year.
Founded in 2018, Florida-based American Oncology Network represents about 100 physicians and 90 advanced practitioners across 18 states. The company's revenues increased from $320 million in 2019 to $944 million in 2021, according to a regulatory filing.
If the deal falls through because American Oncology Network enters into a definitive agreement with another entity, the company must pay Digital Transformation Opportunities a $18 million termination fee.
The companies did not immediately respond to interview requests.
“We launched DTOC with the commitment to our investors to partner with a high growth platform that was leveraging technology to drive improvement within the healthcare industry, and we couldn’t be more excited to fulfill that commitment today through our partnership with AON,” Nazemi said in a news release.