MSP Recovery’s SPAC Deal to Value Combined Firm at  $32.6 Billion

MSP Recovery, specializing in securing Medicare and Medicaid secondary payments, will go public through a merger with a blank-check firm that will give the combined company an enterprise value of $32.6 billion.

Coral Gables, Florida-based MSP announced the tie-up with Lionheart Acquisition Corp. II, a special purpose acquisition company, in a Monday statement that confirmed an earlier Bloomberg News report. MSP’s senior executive team, led by Chief Executive Officer John H. Ruiz, will continue to manage the company.

The deal provides for issuing about 1 billion warrants to former Lionheart stockholders who don’t redeem their shares of its common stock in connection with the merger, according to the statement. MSP’s founders have agreed to sell an equivalent number of their shares back to the company so that provision won’t dilute the stock’s value.

MSP runs a platform for claims recoveries and only earns fees on completion of cases, according to its website. The company, which developed proprietary software, touts its expertise with the Medicare Secondary Payer Act. Backers of MSP include Virage Capital Management LP.

“Medicare and Medicaid pay billions of dollars of health-care claims they should not pay,” Ruiz said in a statement. “Our tools help fix this broken system.”

Lionheart, led by Chief Executive Officer Ophir Sternberg, raised $230 million in an August initial public offering. Bloomberg News reported last week that MSP and Lionheart were in talks.

Lionheart rose 0.8% to $9.97 at 9:56 a.m. in New York trading Monday, giving the company a market value of about $293 million.

The combined company is expected to trade on the Nasdaq under the symbol MSPR.

Keefe, Bruyette & Woods Inc., a division of Stifel Financial Corp., is financial adviser to MSP, while Nomura Securities International Inc. is financial and capital markets adviser to Lionheart.

©2021 Bloomberg L.P.

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