ATLANTA - Sharecare, a digital health company listed on NASDAQ:SHCR, has entered into a definitive merger agreement to be acquired by an affiliate of Altaris, LLC, an investment firm with a healthcare industry focus. Sharecare stockholders are set to receive $1.43 in cash per share, an 85% premium over the company's closing price on June 20, 2024, and an 87% premium over the 90-day volume-weighted average trading price.
The merger will result in Sharecare becoming a privately held entity and its common stock will be delisted from Nasdaq. The transaction is anticipated to close in the second half of 2024, subject to customary closing conditions, including approval by Sharecare stockholders and receipt of required regulatory approvals. The deal is not contingent on financing.
Jeff Arnold, Sharecare’s founder and executive chairman, supports the transaction, planning to vote his shares in favor and retain a significant stake post-merger. Arnold, along with CEO Brent Layton and the current executive leadership, will continue in their respective roles after the acquisition.
Sharecare's virtual health platform aims to improve health outcomes by providing services to individuals, healthcare providers, employers, and government organizations. This alignment with Altaris' investment strategy suggests a shared goal of enhancing healthcare access and outcomes.
The Board of Directors of Sharecare, following a recommendation from a special committee of independent directors, has approved the merger agreement and will recommend that the company's stockholders approve the transaction.
Financial advisors Houlihan Lokey (NYSE:HLI) and MTS Health Partners, along with legal advisor Wachtell, Lipton, Rosen & Katz, are guiding the special committee. Altaris is advised by Kirkland & Ellis LLP, and Jeff Arnold's legal counsel is King & Spalding LLC.
This article is based on a press release statement. The forward-looking statements contained in the press release are subject to risks and uncertainties, including the possibility that the proposed transaction may not be completed. Additional information will be available in the proxy statement to be filed with the SEC, which will provide important details about the proposed transaction for Sharecare’s stockholders.
In other recent news, Sharecare has disclosed its Q1 2024 results and strategic updates. The company reported Q1 revenues of approximately $91 million and an adjusted EBITDA of negative $2.7 million, significantly impacted by a legal dispute. Despite these challenges, Sharecare managed to close multiple deals across its three primary channels: life sciences, provider, and enterprise, and anticipates growth throughout the year.
The life sciences channel secured 35 new pharma brand deals, expected to generate over $80 million annually. The provider channel doubled its average deal size from the previous year, closing 75 deals in Q1. The enterprise channel renewed multiyear contracts and anticipates over $40 million in net new revenue.
InvestingPro Insights
As Sharecare moves towards privatization with its recent merger agreement, the company's financial health is a critical factor for investors to consider. According to recent data from InvestingPro, Sharecare holds a market capitalization of $280.65 million. This figure, while modest, suggests a level of stability that may have contributed to Altaris's acquisition decision. Moreover, the company's management has been actively engaged in share buybacks, signaling confidence in the firm's value and future prospects.
An important metric for investors is the Price to Earnings (P/E) ratio, and for Sharecare, this stands at -2.11. While a negative P/E ratio typically indicates a lack of profitability, Sharecare's liquid assets surpass short-term obligations, providing some financial cushioning. Additionally, the company maintains more cash than debt on its balance sheet, which is a reassuring sign of financial prudence and risk management.
It's worth noting that analysts are not expecting Sharecare to be profitable this year and anticipate a sales decline. This outlook may have been a factor in the company's decision to accept the acquisition offer. However, with a robust gross profit margin of 43.36% over the last twelve months as of Q1 2024, Sharecare demonstrates its ability to maintain a healthy markup on its services.
For investors looking for a deeper dive into Sharecare's financials and future outlook, there are additional InvestingPro Tips available. These insights can provide a more comprehensive understanding of the company's potential post-merger. To explore these further, investors can visit https://www.investing.com/pro/SHCR and use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.