Clover Health Investments, Corp. is going public in a new reverse merger. Founded in 2013, Clover Health provides affordable Medicare Advantage plans to more than 57,000 members in seven states. The company also offers the Clover Assistant platform, which aggregates relevant health data points, including claims, medical charts and diagnostics, and uses machine learning to synthesize that data with member-specific information. This provides physicians with actionable and personalized insights at the point of care, offering suggestions for medications and dosages as well as the need for tests or referrals, among others, to ultimately improve health outcomes.
Clover Health is merging with Social Capital Hedosophia Holdings Corp. III (NYSE: IPOC), a partnership between the investment firms of Social Capital and Hedosophia, which invests in technology companies across a variety of sectors. The deal is valued at $3.7 billion, the largest deal in the Managed Care sector so far in 2020. The acquisition is expected to provide up to $1.2 billion in cash proceeds, consisting of a committed PIPE of $400 million and up to $828 million of cash held in the trust account of Social Capital from its April 2020 IPO.
The PIPE commitment includes $100 million from Chamath Palihapitiya, founder and CEO Social Capital Hedosophia, $50 million from Hedosophia, and the remainder from investors including Fidelity Management & Research and funds affiliated with Jennison, Senator Investment Group, Casdin and Perceptive.
In addition to the merger, Clover Health and the retail giant Walmart (NYSE: WMT) have teamed up to offer a series of Medicare Advantage plans aimed at low-income, Medicare-eligible beneficiaries in certain Georgia counties. Walmart will offer Clove Health’s Medicare plans while also utilizing its Clover Assistant program. This yet another of Walmart’s moves into the healthcare space. Over the summer, the company purchased technology and intellectual property assets from Carezone that help patients manage medication and chronic illness.