Montes Archimedes Acquisition (MAAC) Taking Roivant Sciences Public In $7.3 Billion Deal

By Amit Chowdhry ● May 3, 2021
  • Roivant Sciences (a biopharmaceutical and healthcare technology company) and Montes Archimedes Acquisition Corp. (Nasdaq: MAAC), a special purpose acquisition company (SPAC) sponsored by Patient Square Capital, today announced that they have entered into a definitive business combination agreement. These are the details.

Roivant Sciences (a biopharmaceutical and healthcare technology company) and Montes Archimedes Acquisition Corp. (Nasdaq: MAAC), a special purpose acquisition company (SPAC) sponsored by Patient Square Capital, today announced that they have entered into a definitive business combination agreement. And upon closing of the transaction, outstanding shares and warrants of MAAC will be exchanged for newly issued shares and warrants of Roivant Sciences, which is expected to be listed on Nasdaq under the new ticker symbol “ROIV.”

The deal is expected to deliver up to $611 million of gross proceeds to fund discovery and development programs. And this includes up to $411 million currently held in MAAC’s trust account, as well as a concurrent $200 million common stock private investment in public equity (PIPE) priced at $10.00 per share.

The new institutional and strategic investors and existing Roivant shareholders have committed to participate in the PIPE, including Fidelity Management & Research Company LLC, Eventide Asset Management, Suvretta Capital, Palantir Technologies, RTW Investments, LP, Viking Global Investors, Sumitomo Dainippon Pharma, and SB Management (a subsidiary of SoftBank Group). And the proceeds are expected to extend the company’s operating runway through mid-2024.

Patient Square Capital and key Roivant equity holders and management agreed to long-term lockups with at least 50% of their holdings locked up for 3 years. And in addition, Patient Square Capital has agreed to convert an additional 30% of its shares of MAAC to earn-out shares subject to performance vesting thresholds: 20% of its shares will vest at $15 per share and 10% will vest at $20 per share for 20 of 30 trading days within 5 years of closing.

Jim Momtazee, Managing Partner of Patient Square Capital, will be joining Roivant’s board of directors. And prior to founding Patient Square Capital, Momtazee was a 21-year veteran of KKR where he helped form its health care investment team 20 years ago and ran that team for over a decade.

Roivant is going to continue to operate under its current management team led by Chief Executive Officer Matthew Gline. And Roivant founder Vivek Ramaswamy will continue to serve as Executive Chairman.

The boards of directors of both Roivant and MAAC unanimously approved the proposed transaction. And completion of the transaction, which is expected in the third quarter of 2021, is subject to approval of MAAC shareholders and the satisfaction or waiver of certain other customary closing conditions.

In this all-primary transaction, current holders of Roivant shares and equity awards will be maintaining their existing equity interests in Roivant. And current shareholders and warrant holders of MAAC will convert their shares and warrants of MAAC into common shares and warrants of Roivant on a one-for-one basis. Assuming a share price of $10 per share and no redemptions of MAAC shares, Roivant is expected to have an initial market capitalization of $7.3 billion inclusive of its pro forma net cash balance of approximately $2.3 billion.

Assuming no redemptions of MAAC shares, the current shareholders of Roivant will own approximately 92% of Roivant immediately post-closing (including shares issued in connection with Roivant’s recent acquisition of Silicon Therapeutics and existing Roivant shareholder participation in the PIPE).

The closing of this deal is expected in the third quarter of 2021 and is subject to the approval of MAAC’s shareholders and the satisfaction or waiver of certain other customary closing conditions.

KEY QUOTES:

“Roivant is at the cutting edge of using technology to discover and develop transformative medicines for a wide range of serious diseases, and in a very short time they have established a remarkable track record of building subsidiaries that have run successful registrational clinical trials for approved medicines. I first met the company in 2015 and have watched its growth over the last 6 years with admiration. Based on our extensive due diligence spanning the last 5 months, I look forward to a long-lasting partnership with one of the most exciting and innovative companies in the life sciences industry.”

— Jim Momtazee, Managing Partner of Patient Square Capital

“I look forward to the next chapter of Roivant’s growth by beginning our life as a public company with an exceptionally strong and diverse base of long-term investors. We look forward to continuing to deliver important medicines to patients through our development engine and our rapidly growing drug discovery capabilities spanning multiple therapeutic areas and modalities.”

— Roivant Chief Executive Officer Matthew Gline