Social Capital Hedosophia (NYSE:IPOC) announced today at a special meeting of its stockholders, that the Company’s stock holders voted to approve the adoption of the previously announced merger deal with Clover Health. This deal rates Clover Health at an enterprise value of about $3.7 billion.
Social Capital Hedosophia Holdings Corp. III. is a special purpose acquisition company (SPAC) created for a sole purpose of raising capital through IPO and acquiring an existing company, thus making that company public. In this case Clover Health, an insurtech company, which aims to disrupt the Medicare Advantage space by integrating tech into its process.
IPOC and Clover will combine through a mix of cash financing and stock deal which will bring in $1.2 billion of gross proceeds to Clover Health. Of those $1.2B some $728 million of the transaction proceeds will go straight to Clover and up to $500 million of cash proceeds will go to existing Clover stockholders.
The transaction also includes a $400 million PIPE investment at $10 per share. These funds include $100 million from Chamath Palihapitiya, the founder and CEO of Social Capital Hedosophia.
Following the merger both companies will trade under a new stock ticker NASDAQ:CLOV. San Francisco-based Clover Health had $338 million in revenue in the first 2 quarters of 2020, a 35% year-on-year increase compared to same period in 2019. But with a $23 million net loss.
Clover’s largest venture stockholder is Greenoaks Capital with 28% of voting shares. CEO and founder Vivek Garipalli owns 27% of voting shares.