If at first you don’t succeed, make another take-private offer, as the company is sinking. Anne Wojcicki, CEO of the terminally beleaguered 23andMe, has with little fanfare placed on the table a take-private offer for $2.53 per share, or $74.7 million, a small premium above their Friday close on Nasdaq CM at $2.42. (Wednesday’s close was $2.23.) With a market cap today of $65 million, it is a far cry from their post-SPAC days in 2021 where their valuation hit a peak of $4.8 billion by October. The news was revealed in their filing of a Schedule 13D with the Securities and Exchange Commission.
Ms. Wojcicki, or more exactly the Anne Wojcicki Revocable Trust, is backed in this take-private transaction by New Mountain Capital, with her legal advice from heavyweight law firm Skadden Arps Slate Meagher & Flom LLP. New Mountain Capital is being advised by Ropes & Gray LLP. Dechert LLP is reportedly on the company’s side although in January Goodwin Procter LLP was listed.
This is a far cry from her seemingly off-the-cuff offer of $0.40 on 31 July to the previous board’s Special Committee, which this Editor estimates at a $11-12 million offer. The 23andMe seven-person board rejected it a few days later, then departed in frustration on 17 September 2024. They were replaced by a three-person board–plus Ms. Wojcicki, the controlling shareholder. After their 28 January Q3 report that simply confirmed their sinking liquidity and revenue despite shedding/closing lines of business, the new Special Committee, consisting of the three outside directors, opened up 23andMe to ‘strategic alternatives’ on 31 January.
The consumer/research genetics company’s cash on hand is an anemic $79.4 million as of 31 December–barely above, and likely currently below the $74.7 million Wojcicki/NMC offer. There is nothing left to sell other than Lemonaid [TTA 22 Jan]–but why no one is stepping up to buy a company with a foothold in telehealth remedies including GLP-1 drugs, even with FDA’s change away from compounded drugs, is a mystery
Assume this is a best offer? Whether this non-binding proposal will be countered by others is not known, but a safe assumption is that this will be the only one on the table. Ms. Wojcicki has effective majority control, confirmed in the Schedule 13D filing as 20% of Class A common stock and 69.4% of Class B common stock. Reportedly this gives her 49.99% of the voting power. Both Ms. Wojcicki and New Mountain are offering secured debt financing to fund 23andMe’s operations through the transaction’s closing, As a result, other offers are not likely in this Editor’s estimation.
No timing is reported or comment available from 23andMe. CNBC, Lawyer Monthly
Your recent coverage of 23andMe has been great, thank you.
I wanted to note that in this Feb 27 article, you estimate Wojcicki’s August 2024 offer of $0.40 per share to have equated to $11M-$12M. That figure is incorrect because it does not take into account the 20-to-1 stock split since then. As such, her original offer was closer to $240M at that time. So the actual story here, best as I can tell, is that Anne is actually looking to save ~$165M in the end! Many thanks to the original board for taking a stand for the shareholders and resigning back in August! Take that, Anne! Delayed your plans by 6 months! And only cost us $165M, HA!
Hi Trevor–that is a neat bit of figuring indeed because it does assume that if the buy went through, so would the 20-to-1 split and a subsequent rise in the stock price. I don’t disagree that shareholders have been cheated beyond recognition. As you’ll see in the most recent article, the withdrawal in days of NMC from a bid points to something fairly drastic in Denmark. Coupled with the almost instantaneous rejection of her offer by her three-person handpicked board…..
You may share my wondering if 23andMe has any future at all other than a wealthy CEO’s plaything. One thing if it were private, but it is a public company with shareholders other than Ms. Wojcicki. (And I thought I saw every financial shenanigan possible back in the airline deregulation days!)