Futu News reported on September 16 that Prenetics, the world's leading genetic and diagnostic testing company, announced today that it plans to launch a merger with Artisan Acquisition, a special purpose acquisition company (SPAC) founded by Chow Tai Fu and New World entrepreneur Zheng Zhigang. The two sides have signed an agreement to merge.

Once the transaction is completed, Prenetics is expected to be listed on the NASDAQ. The transaction is expected to be completed in the fourth quarter of 2021 or the first quarter of 2022. The securities of the merged company (“PubCo”) will be traded under the stock code “PRE”.

In this deal, Prenetics' corporate valuation will rise to $1.25 billion, and the combined equity value will be around $1.7 billion. If the merger and listing is successful,Prenetics will be the first unicorn company in Hong Kong to be listed on any open market.

Prenetics will raise $459 million in cash through this merger deal, including $339 million previously raised by Artisan, as well as fromForward purchase agreements(FPA)withUS$120 million in post-IPO private equity (PIPE) transactions.FPA and PIPE are common in SPAC merger deals. This round of FPA is led by Hong Kong investment company Apex Management and private equity group PAG. This round of PIPE is led by Indonesian enterprise group Lippo Group and a well-known national investment institution.

According to the announcement, the proceeds from the merger will drive Prenetics' growth and will be used for strategic acquisitions, R&D, product launches, and business expansion in the US, Europe, Middle East and Africa, and Southeast Asia.

Prenetics: Hong Kong's genetically-tested unicorn receives strategic investment from Ali and Ping An

Established in 2014, Prenetics is the world's leading genetic testing and health diagnosis company. Currently, its business has expanded to 10 cities around the world. According to TrustPilot Review, in terms of the number of tests, Prenetics ranked first among diagnostic/DNA testing companies based in Hong Kong and the UK.

According to Prenetics's announcement, the company expects revenue to reach US$205 million in 2021, up 215% year-on-year from US$65 million in 2020. It is expected that the company will continue to maintain a significant revenue growth momentum in the future.Revenue for the full year of 2025 will exceed 600 million US dollars.

Notably, since its establishment, the company has received more than 85 million US dollars of strategic capital support from Alibaba Entrepreneurs Fund, Ping An Venture Capital, and Apis Partners.

Product matrices

Prenetics has a strong track record in commercializing cutting-edge science, developing it into commercial products and solutions based on prevention, diagnosis, and personalized care to meet new market needs.

Prenetics' existing products include:

• CircleDNA

Consumer genetic testing, using full exon gene sequencing technology, provides over 500 valuable health reports.

• Circle HealthPod

A CE-IVD certified point-of-care or home rapid testing system suitable for testing the current novel coronavirus (COVID-19). After development and testing, it will be extended to influenza and sexually transmitted diseases (STDs), and will be launched in 2022.

• Project screen

In response to the one-stop PCR nucleic acid testing solution for the novel coronavirus, Prenetics has cooperated with the Hong Kong Government, Hong Kong International Airport, London Heathrow Airport, and many multinational companies such as Virgin Atlantic, Carnival Cruises, and SKY TV to conduct more than 5 million novel coronavirus tests.

R & D strength

Prenetics' internal team is experienced, scientist-led, and has strong R&D and product innovation capabilities. The members come from academia and have held key positions in other well-known healthcare companies such as Exact Sciences and EverlyWell.

Additionally, Prenetics has a multi-year strategic R&D partnership with Oxford University, focusing on the development of molecular diagnostics and new infectious disease tests (such as infectious diseases and STDs).

Artisan Acquisition: SPAC initiated by Zheng Zhigang, the head of New World

Artisan Acquisition, the SPAC company that bought Prenetics, initiated by Cheng Zhigang, a well-known Hong Kong entrepreneur, focusing on the high-growth global healthcare, consumer, and technology industrieswas listed on NASDAQ on May 14, 2021.

Cheng Chi-kong is the third-generation heir to the Cheng Yu Tung family, one of the four largest families in Hong Kong. He is currently serving$NEW WORLD DEVELOPMENT (00017.HK) $Executive Vice Chairman and General Manager, also$ Chow Taifuku (01929.HK) $Executive Director.

Meanwhile, Zheng Zhigang is also the founder of the K11 brand and C Ventures (C Ventures). He has rich experience and excellent past performance in the field of investment. Among them, in the healthcare sector, Dr. Cheng led the completion of the HK$21.5 billion acquisition of Fortis Insurance in 2019; founded the new health brand Humansa (Inshan Youshe) to enter the healthcare market in 2018.

C Capital is an investment club for the world's most elite families and funds. It has many excellent investment cases in the fields of healthcare, consumer and technology around the world, including popular companies such as Xiaopeng Motor, NIO Auto, JD Logistics, Manbang Group, Gojek, Xiaohongshu, and My Little Pony Zhixing.

Prenetics' collaboration model with Artisan

Prenetics said the deal will have significant synergies. Through the merger with Artisan, Prenetics can combine Zheng Zhigang's extensive business network, covering retail, hotels, healthcare, real estate and other strategic businesses, bringing huge opportunities to closely cooperating partners and greatly expanding Prenetics' business platform.

Mr. Yang Shengwu, CEO and Co-Founder of Prenetics“This announcement is an important milestone for both Prenetics and Hong Kong entrepreneurs,” he said. Prenetics' goal is to decentralize the healthcare industry to benefit millions of patients around the world. I am humbled and honored by Mr. Zheng Zhigang's trust in us, and we look forward to continuing to work closely with his business network to seize the huge potential to disrupt the healthcare market. With our strong existing business foundation, active product development, and a clear M&A strategy for US business expansion, we have the advantage of being a pioneer and are well placed to develop the next phase of our business.”

Mr. Zheng Zhigang, founder of ArtisanHe said, “Our mission is to find companies with significant global influence and high growth, and I'm very happy to have found Prenetics. Mr. Yang Shengwu has successfully established an outstanding enterprise that is encouraging from all sides. I'm proud to partner with Prenetics, support it as the first Hong Kong unicorn to go public, and support local entrepreneurs. Our shared philosophy is to provide more convenient and decentralized healthcare services to millions of people around the world. I look forward to seeing this collaboration to create more shared value for the public.”