Portable MRI Device Maker Hyperfine Going Public Via SPAC: What Investors Should Know

An MRI scanner on wheels is the highlight of Hyperfine, a company that announced a SPAC merger Thursday morning.

The SPAC Deal: Hyperfine Inc and Liminal Sciences are merging with HelathCor Catalio Acquisition Corp HCAQ valuing the company at an enterprise value of $580 million.

A $126 million PIPE for the deal includes investments by Ark Invest.

The merger marks the third company founded by Dr. Jonathan Rothberg to go public via SPAC with Butterfly Network Inc BFLY and Quantum-Si Inc QSI previously completing deals.

Public HCAQ shareholders will own 21.7% of the company. The new company will trade on the Nasdaq as HYPR after the merger is complete.

About Hyperfine, Liminal: Hyperfine is the creator of the portable MRI system named Swoop. Liminal Sciences is dedicated to non-invasive brain monitoring.

The Swoop was FDA approved in 2020 and offers an easy-to-use interface and portable design providing accessibility for hospitals and other medical facilities.

Hyperfine utilizes a subscription-based business model and provides tools and software for its customers.

Liminal has a vision to make brain monitoring as simple as taking blood pressure measurements, according to the release. A non-invasive brain monitoring device is currently being developed by the company. The company believes its sensors can help in traditional care settings like the ICU and operating rooms with a long-term goal of monitoring patients at home.

“We are taking the next step in our mission to provide affordable and accessible imaging, sensing and guided robotic intervention to democratize and bring equity to healthcare for people around the world,” Rothberg said.

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Growth Ahead: The imaging market is listed with a $23 billion total addressable market, according to the company. The company’s additional markets of sensing and guided intervention could add addressable markets of $22 billion and $28 billion, respectively.

Sense and Intervene businesses both have products in development that could complement the existing imaging business. The company has the potential to “build an ecosystem across the care continuum,” according to the presentation.

The company has 46 installed portable MRI devices with a target market size of over 100,000 hospitals and outpatient centers.

The portable MRI device reduces workflow time by 94% to 90 minutes and can help tackle the 22% to 46% of cases that see adverse events happen during transport of patients according to the presentation.

A $7,250 monthly subscription model could produce a high recurring revenue model for the company.

Financials: The combined company is expecting revenue of $2.3 million in fiscal 2021 and $16.3 million in fiscal 2022. Revenue is expected to grow at a compounded annual growth rate of 238% from fiscal 2021 to fiscal 2025.

The company projects revenue out to fiscal 2025 with a total of $301.6 million projected. The company lists gross margins of 47.9% in fiscal 2022 growing to 71.9% in fiscal 2025.

HCAQ Price Action: HCAQ shares are up 3% to $10 on Thursday.