Robbins’s Longview Tapped by Ultrasound Startup for SPAC

(Bloomberg) -- A Gates Foundation-backed maker of a pocket-sized ultrasound device that can plug into a smartphone is going public through a reverse merger with Larry Robbins’s Longview Acquisition Corp. in a deal that values the company at $1.5 billion.

The transaction is expected to provide Butterfly Network Inc. with more than $580 million in cash, including up to $414 million held in Longview’s trust, assuming early investors choose not to redeem. The capital is expected to help ramp up sales of its Butterfly iQ, the hand-held ultrasound device that costs roughly $2,000. Butterfly, which has been selling the device for two years, says the deal will help accelerate sales around the world.

The merger will unite a who’s-who list of investors ranging from Butterfly backers like Baillie Gifford and the Bill and Melinda Gates Foundation with Robbins’s Glenview Capital Management. Robbins will join the company’s board with Longview and its affiliates expected to own 7.6% of the company.

The money raised will help Butterfly expand the market for iQ while funding development of future iterations and next-generation devices and updates, Butterfly Chief Executive Officer Laurent Faracci said by phone. As Butterfly starts to scale its business “nobody is better suited to support us than Larry and Glenview, that’s why we chose them as our partner.”

Longview also raised $175 million in new equity to support the deal. Investors included Eldridge Industries LLC, Fidelity Management, and Wellington Management.

“In all the years we’ve been doing this, we’ve tried to align ourselves with companies that expand access and lower the cost of healthcare,” Robbins said in a telephone interview. “And this is a break-through technology that takes ultrasound into an entirely different realm.”

The company’s iQ and iQ+ devices hook into a smartphone and don’t need different attachments to survey different parts of the body. The iQ was approved for use by U.S. regulators in 2018 while the iQ+, which boasts additional features like a smaller probe head, was released this year.

Robbins, who made his name with the success of his hedge fund firm Glenview, said relationships with health insurance providers and those who offer care like hospitals that have been developed over the last two decades will “help us to give the company connectivity and to spur collaboration with large health systems.” Glenview’s top holdings include heavy-weights like Tenet Healthcare Corp., Cigna Corp., and HCA Healthcare Inc.

The combination is expected to be completed in the first quarter of next year. The company expects to be cash flow positive in 2024 and have sufficient capital to fund its business plan and allow it to evaluate additional investments, Robbins said.

Robbins’s blank-check company debuted in May, with equity units consisting of one common share and one-third of a warrant. Shares of the special purpose acquisition company climbed as much as 8.5% on Friday to trade at a record $10.70. Butterfly Network is expected to list on the New York Stock Exchange under ticker BFLY.

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