Cano Health Going Public Via Barry Sternlicht SPAC: What Investors Should Know

The rumored merger between Cano Health and Jaws Acquisition Corp JWS was confirmed Thursday morning.

The SPAC Deal: Cano Health is a primary care-centric company that is technology-powered.

Cano Health has 103,000 members and operates in 14 markets with 564 primary care physicians.

Jaws Acquisition is led by Barry Sternlicht, a notable real estate investor. He launched the SPAC to tackle a non-competing market. The SPAC raised $690 million.

The deal was part of Benzinga's coverage Thursday on SPACs Attack, a new daily live show on YouTube.

Related Link: Sternlicht Backed SPAC Jaws' $4.4B Merger Deal With Cano Health Could Be Announced Today: WSJ

What’s Next: Sternlicht and Cano Health CEO Dr. Marlow Hernandez appeared on CNBC Thursday to discuss the deal with host Andrew Sorkin.

Cano Health is “one of the largest players in the market,” Sternlicht said. 

Cano Health is partnered with Humana Inc HUM, UnitedHealth Group UNH, Anthem Inc ANTM and Aetna, which is owned by CVS Health Corporation CVS.

Humana owns 5% of Cano Health and doesn’t plan on selling shares, Sternlicht said. 

“Hopefully I can mentor him,” he said of Hernandez, adding that he's excited to join the board. 

Financials: Cano Health will go public at a $4.4-billion valuation.

The company expects to hit $1.45 billion in 2021 revenue. Hernandez said the company will grow revenue by $1 million every day next year.

Revenue has grown at a compounded annual growth rate of 73% in the last five years.

Sternlicht laughed at a question about a path to profitability and revenue growth from Sorkin.

The deal is being done “not to fund operations, it’s to fund growth.”

Sternlicht said the company is going to be very profitable in the long-term.

He compared the company to others in the market and said Cano has had more members and is more profitable despite being in fewer markets than peers. 

With the deal completed, Cano will pay off $450 million in debt, leaving it cash flow positive, with no debt on the books, Sternlicht said.  

Price Action: Shares of Jaws Acquisition Corp. were up 10.56% at $11.20 at last check Thursday.