Amid the recent explosion of SPAC deals, the latest company to tap into the booming market is the health app Sharecare, which has announced an agreement to merge with the special-purpose acquisition company (SPAC) Falcon Capital Acquisition Corp (NASDAQ:FCAC) in a deal that values the company at $3.9 billion.

Falcon Capital Acquisition Corp is a SPAC led by Alan Mnuchin, a finance industry veteran who’s notably the brother of Steve Mnuchin, the US Treasury Secretary that served under President Trump. Alan Mnuchin just like his brother Steve is a veteran of the banking giant Goldman Sachs and is the founder of his own investment bank, AGM Partners LLC.

Sharecare is a health app that provides consumers easy access to vetted health information and data. The company makes money from a stream of “knowledge partners”, usually health-centric advertisers that pay Sharecare to get their answers to health-related questions listed on its platform as a method of brand awareness. This business model has drawn a significant dose of criticism from health experts.

Sharecare was founded by Jeff Arnold, a serial health-tech entrepreneur who previously founded the online health portal WebMD. WebMD is an online health portal and publisher that made a name for itself as one of the stars of the late-1990s dot-com era. The company was sold for $2.8 billion in 2017 to Internet Brands, an internet services conglomerate owned by the private equity firm KKR.

Apparently, Arnold is set to score his second big entrepreneurial win after previously founding WebMD. With a $3.9 billion valuation at market debut, Sharecare would be one of the most valuable publicly-traded health-tech companies.

Transaction details

Via its merger, Sharecare would get $770 million in cash to fund its operations. Out of that amount, $345 million accounts for held in trust by Falcon Capital Acquisition Corp while the remaining $425 million will come from a PIPE round committed by a group of investors led by Koch Strategic Platforms, Baron Capital Group, Eldridge, Woodline Partners LP, and Digital Alpha.

The $3.9 billion valuation for Sharecare is a 9.5x times multiple of the company’s projected revenue for 2021.

Sharecare’s merger is expected to be completed in the second quarter of 2021. 

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