Cano Health Nears Deal With Barry Sternlicht SPAC
Deal values operator of medical centers for seniors at $4.4 billion, including debt
A blank-check company backed by real-estate investor Barry Sternlicht is in talks to merge with Cano Health LLC in a $4.4 billion deal that would take the health-care provider for seniors public, according to people familiar with the matter.
Mr. Sternlicht’s special purpose acquisition company, Jaws Acquisition Corp. , could announce a deal valuing Cano Health at $4.4 billion, including debt, as soon as Thursday, the people said—assuming the talks don’t fall through at the last minute.
As is typical in SPAC deals, as part of the transaction, Cano Health would receive an investment—in this case totaling roughly $800 million—from several investors, including Mr. Sternlicht, one of the people said.
Blank-check companies turn the typical IPO model on its head, raising money by going public before they have a business and then hunting for a target—usually over a period that lasts as long as two years. Investors have poured money into such vehicles at record levels this year as the coronavirus pandemic and market volatility make traditional IPOs trickier to pull off.
Jaws went public in May and had a market value of about $875 million as of Wednesday afternoon. Any deal would be subject to a shareholder vote.
Mr. Sternlicht is founder and chief executive of Starwood Capital Group, a real-estate investment firm with more than $60 billion of assets under management. He serves as chairman of Jaws, which indicated from the outset it would target a company that doesn’t compete with Starwood and is growth-oriented.
Cano Health operates primary-care medical centers in Florida, Texas, Nevada and Puerto Rico, primarily serving members of Medicare Advantage, the private-sector alternative to traditional Medicare for seniors. Based in Miami, Cano has been owned by private-equity firm InTandem Capital Partners since 2016.
Cano was founded in 2009 by Dr. Marlow Hernandez, who is also CEO, and has been expanding its footprint.