A vendor that uses CT images to create 3D models of the heart is going public with an enterprise value of $2.4 billion, those involved announced Thursday.
Glenview Capital Management is investing in HeartFlow as part of the deal. The New York hedge fund is doing so by creating a special-purpose acquisition company, which will merge with the Redwood City, California, artificial intelligence vendor later this year.
Upon completing the M&A deal, HeartFlow will list on the New York Stock Exchange under the ticker symbol HFLO. The transaction also provides the cardiac care specialist with $400 in cash to fuel growth, product development and other corporate purposes.
“For us, HeartFlow’s compelling investment attributes leapt off the page: addressing a massive unmet medical need with proprietary, innovative technology through a highly attractive business model that experts widely cite as delivering superior patient outcomes at lower systemic costs,” Larry Robbins, chairman of Longview Acquisition Corp. II and CEO of Glenview Capital Management, said July 15.
First founded 11 years ago, HeartFlow utilizes standard coronary computed tomography angiograms to create a personalized model of the heart. It provides CT imaging-derived, fractional-flow reserve values along the coronary arteries, info that helps physician understand the degree to which blockages are impeding blood flow to the heart.
HeartFlow said it’s targeting a $10 billion addressable market opportunity with its AI imaging analysis. It hopes to expand that figure to $50 billion by introducing new products and pinpointing additional customers. Currently, 470 sites use the tech globally, including 300 in the U.S. and about 80% of the country’s top-50 heart hospitals.
The proposed transaction pegs HeartFlow with an enterprise value of $2.4 billion and would deliver the firm with nearly $600 million in gross proceeds. Legacy shareholders of HeartFlow and its employees will own 73% of the public company upon its completion. Both companies’ boards have already approved the deal, while Longview’s stockholders still must give their blessing. Those involved expect to close the transaction in Q4 of 2021.
Glenview Capital Management helped take ultrasound maker Butterfly Network public in a similar $1.5 billion merger last year.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.