Medicare Advantage startup Clover Health is slated to become public through a merger with Social Capital Hedosophia Holdings Corp. III, a special purpose acquisition company, Clover said Tuesday.
The deal values Clover at $3.7 billion. Clover’s management team, including CEO Vivek Garipalli and President Andrew Toy, will continue to lead Clover following the transaction, which is expected to close in the first quarter of 2021.
Chamath Palihapitiya, founder and CEO of Social Capital Hedosophia, will act as a senior advisor to the Clover’s management team. Social Capital Hedosophia is a partnership between investment firms Social Capital and Hedosophia.
The deal is expected to deliver up to $1.2 billion of gross proceeds, including up to $828 million of cash. Clover will receive up to $728 million of the transaction proceeds, and up to $500 million of cash proceeds will be allocated to existing Clover shareholders, according to a news announcement.