Even SPACs are getting involved in the physician medical group market. The Oncology Institute of Hope and Innovation, the largest community oncology practice in California, just announced it was going public in an $842 million merger with DFP Healthcare Acquisitions Corp. (NASDAQ: DFPH), a SPAC sponsored by an affiliate of Deerfield Management Company, L.P. The Oncology Institute was formed just this past March by a joint venture between Havencrest Healthcare Partners, M33 Growth and ROCA Partners.
The Oncology Institute has more than 80 board-certified hematologists/oncologists spread throughout 50 offices in Arizona, California and Nevada. Since its inception, it announced a single deal for Oncology Association back in May, a single-physician practice that expanded The Oncology Institute’s presence in the Tampa, Florida market.
The Oncology Institute is expected to generate $350.8 million in revenue in 2021.
In addition to the approximately $230 million held in the DFP Trust Account, healthcare investors, including Fidelity Management & Research Company LLC, Deerfield Management Company, L.P. and Redmile Group, LLC have committed to purchase $275 million of shares of common stock of the Company at $10.00 per share through a PIPE investment. The Oncology Institute will collectively own 48%, Deerfield will own approximately 14%, other DFP stockholders (including other PIPE investors) will own 33%, and DFP’s sponsor will own 5%.
DFP estimates that the company will have an initial market capitalization of approximately $1.06 billion, with approximately $225 million of cash on the balance sheet and a strong growth trajectory. Following the close of the transaction, The Oncology Institute will become publicly traded on the NASDAQ under “TOI.”
Guggenheim Securities, LLC is acting as financial advisor to The Oncology Institute. Deutsche Bank Securities and UBS Investment Bank are acting as financial advisors to DFP. Latham & Watkins LLP is acting as legal advisor to The Oncology Institute, White & Case LLP and Polsinelli PC are acting as legal advisors to DFP, and Katten Muchin Rosenman LLP is acting as legal advisor to Deerfield.
