- Ginkgo Bioworks, a specialist in engineering cells for biotechnology, industrial and agricultural uses, will go public by merging with a special purpose acquisition company, or SPAC, in a deal that values the company at a lofty $15 billion.
- The merger with Soaring Eagle Acquisition Corp. will give Ginkgo Bioworks a place on the Nasdaq stock exchange as well as approximately $2.5 billion in proceeds, $775 million of which will come through private investments in public equity by an array of high-profile backers.
- Eagle Equity Partners is co-sponsoring the deal with Bellco Capital, an investment firm led by Arie Belldegrun, the founder of cancer cell therapy companies Kite Pharma and Allogene Therapeutics. Both Eagle and Bellco are investing in Ginkgo stock at $10 per share.
Ginkgo will jump to public markets in one of the largest life sciences-focused SPAC deals, nearly a decade and a half after its founding by a group of MIT scientists.
Ginkgo's vision is ambitious: engineering cells to have an impact on physical goods industries that's similar in magnitude to the impact programming computers had on information-based industries. While the company has customers in biotech, bioprocessing, food, agriculture and consumer goods, its business has a ways to grow before matching its vision.
Last year, Ginkgo posted $77 million in revenue, according to an investor presentation on the deal. Operating costs more than offset that revenue, however, and the company recorded a net loss of about $127 million.
Ginkgo forecasts revenue will nearly double to $150 million next year, making its $15 billion valuation 100 times predicted 2021 revenue.
The $2.5 billion in proceeds, though, will help Ginkgo expand and scale across more partnerships. Ginkgo earns money from upfront payments to cover costs for programs it runs for its customers, as well as royalties on finished programs or equity in partner companies. Approximately 80% of deals signed last year had direct R&D costs covered upfront, according to Ginkgo's presentation, not adjusting for free COVID-19 services the company provided.
Ginkgo and its new SPAC partners anticipate the deal will close in the third quarter, after which Ginkgo would trade on Nasdaq under a new ticker symbol.
Current Ginkgo CEO Jason Kell will remain chief executive of the new company, and current President and Chief Operating Officer Reshma Shetty will retain her role as well.
Belldegrun will join Ginkgo's board of directors, as will Eagle Equity Partners CEO Henry Sloan.
The merger is the latest SPAC deal in the life sciences sector and one of the largest, following one week after Roivant Sciences merged with Montes Archimedes Acquisition Corp. in a $611 million deal. Last year's boom in SPACs going public, however, shows some signs of slowing down, leaving the many blank-check companies competing for available targets.
Scrutiny from federal regulators, meanwhile, is increasing, raising new questions about the pace of these deals moving forward.