BOSTON, June 9, 2021 /PRNewswire/ -- Valo Health,
LLC ("Valo"), the technology company using human-centric data and
artificial intelligence (AI) powered computation to transform the
drug discovery and development process, and Khosla Ventures
Acquisition Co. ("KVAC") (NASDAQ: KVSA), a special purpose
acquisition company founded by affiliates of Khosla Ventures, LLC,
announced today that they have entered into a definitive merger
agreement.
![Valo Health LLC Valo Health LLC](https://mma.prnewswire.com/media/1529291/Valo_Logo.jpg)
A Flagship Pioneering company, Valo is building a
fully-integrated, end-to-end approach to developing drugs from
target discovery through approval using its Opal Computational
Platform™. Built on large scale, high quality longitudinal and
omics data, Valo's Opal platform is designed to accelerate the rate
of drug discovery compared to that of traditional operators, by
allowing information and data to be shared in parallel at every
stage of the drug discovery and development process, reducing the
dependency on surrogates, and enabling insights across preclinical
and clinical to drive towards therapeutic success. Valo has built
an internal pipeline with two clinical stage assets and 15
prioritized pre-clinical assets across cardiovascular metabolic
renal, neurodegeneration and oncology fields, as well as a deep
pipeline of additional candidates. This transaction positions Valo
to use the full power of technology to accelerate multiple programs
through clinical trials.
David Berry, CEO of Valo,
said:
"We see this partnership with KVAC as a unique and
fantastic opportunity to bring the future forward to transform and
accelerate the discovery and development of life-changing
therapeutics. Khosla's reputation is second to none for building
and investing in transformational technology-enabled businesses,
and we believe this partnership helps realize our vision - of
accelerating the creation of life changing drugs."
Samir Kaul, Founding Partner
and Managing Director at Khosla Ventures, said:
"Khosla
Ventures invests in bold, early & impactful companies and
believes Valo meets these criteria. Valo is building an
end-to-end fully-integrated computational approach to drug
discovery and development – one built on human data throughout the
entire process. They have already established an impressive lineup
of clinical and early discovery therapeutic programs. By bringing
powerful computational approaches and human data across the
lifecycle of drug discovery and development – aiming to reduce
time, cost and risk to programs - Valo offers to potentially change
the value curve for a trillion-dollar market segment. Valo fits
squarely into the companies we are excited to back and bring our
experience to."
KVAC set out to partner with a private, high quality growth
company that intends to address a large market opportunity with
highly differentiated and proprietary technology. KVAC
believes there are a number of deeply technical sectors, including
pharmaceuticals, climate, food and others, where scale capital can
accelerate growth, and where a SPAC vehicle provides a more
optimized financing transaction than traditional public financings.
KVAC believes that the Valo acceleration model, driven by
human-centric data and computation, offers a scalable and
differentiated drug development model that meets these criteria—and
coupled with the company's preclinical and clinical programs, has
the company well positioned for growth. With two in-licensed
clinical stage assets and 15 preclinical programs across
cardiovascular metabolic renal, oncology, and neurodegenerative
diseases, KVAC believes Valo meets both of the foregoing criteria.
KVAC and Valo believe that AI and high throughput automation,
melded with traditional drug development expertise, will improve
drug discovery in a dramatic way, reduce the significant failure
rate inherent in traditional drug development, improve return on
research investment and increase drug approvals. KVAC believes that
Valo's use of AI across its pipeline from target discovery and
therapeutic development, to clinical development, trial design, and
patient care, gives Valo significant advantages over companies that
have largely focused AI on trying to improve single points of the
therapeutic pipeline. Further, KVAC is excited to partner with
Flagship Pioneering, which founded Valo, Indigo, Moderna, and more
than 100 science-based businesses, to help Valo revolutionize the
pharmaceutical industry.
Transaction Overview
The transaction values the combined company at a pro forma
market value of approximately $2.8
billion. The combined company is anticipated to have a pro
forma cash balance of approximately $750
million before deducting anticipated transaction expenses,
including existing Valo cash of approximately $250 million as of the date hereof, approximately
$333 million of net cash held in
KVAC's trust, after deducting deferred underwriting commissions and
assuming no redemptions, and a $168.5
million private investment in public equity ("PIPE") priced
at $10.00 per share. Institutional
and strategic investors or their affiliates and existing Valo
shareholders that have committed to participate in the PIPE include
a leading integrated healthcare delivery network, Khosla
Ventures, NG MGG Strategic, Caz Investments, and returning
investors Koch Disruptive Technologies, Flagship Pioneering, Public
Sector Pension Investment Board (PSP Investments), Invus, State of
Michigan Retirement Systems, HBM Healthcare Investments and
Longevity Vision Fund. Net proceeds from this transaction after
transaction expenses will be used to advance Valo's preclinical and
clinical assets, develop its software platform, support new and
existing growth initiatives and working capital, and other general
purposes.
The sponsor of KVAC has agreed to a 12-month lock-up following
the acquisition, with early release based on the achievement of
performance targets, as further discussed in the KVAC prospectus.
The sponsor has also agreed to subject half of its sponsor promote
to a tiered structure that rewards success at performance vesting
thresholds, significantly above the current stock price further
detailed in the prospectus. In addition, the KVAC sponsor is
supporting the SPAC with a $25
million forward purchase agreement backstop and KVAC has no
warrants.
The closing of this transaction is anticipated to occur in the
third quarter of 2021 and is subject to the approval of KVAC's
stockholders and the satisfaction or waiver of certain other
customary closing conditions.
Samir Kaul, Founding Partner and
Managing Director at Khosla Ventures, is expected to join Valo's
Board of Directors following the completion of the business
combination.
Additional information about the proposed transaction, including
a copy of the Business Combination Agreement and an investor
presentation, will be provided in a Current Report on Form 8-K to
be filed today by KVAC with the Securities and Exchange Commission
("SEC") and available at www.sec.gov.
Advisors
J.P. Morgan Securities LLC is serving as the
financial advisor to Valo and as KVAC's sole placement agent for
the PIPE. Goodwin Procter LLP is acting as legal counsel to Valo.
Latham & Watkins LLP is acting as legal counsel to KVAC. Cooley
LLP is acting as legal counsel to the placement agent.
Presentation Details
Valo and KVAC's joint investor conference call to discuss the
proposed transaction can be accessed via webcast at:
https://services.choruscall.com/mediaframe/webcast.html?webcastid=L2pXMuhi
and Valos's website:
https://www.valohealth.com/investors
About Valo Health
Valo Health, LLC ("Valo") is a technology company built to
transform the drug discovery and development process using
human-centric data and artificial intelligence ("AI") computation.
As a digitally native company, Valo aims to fully
integrate human-centric data across the entire drug development
lifecycle into a single unified architecture, thereby accelerating
the discovery and development of life-changing drugs while
simultaneously reducing the cost, time, and failure rate. The
company's Opal Computational Platform™ consists of an integrated
set of capabilities designed to transform data into valuable
insights that may accelerate discoveries and
enable Valo to advance a robust pipeline of programs
across cardiovascular metabolic renal, oncology, and
neurodegenerative disease. Founded by Flagship
Pioneering and headquartered in Boston, MA, Valo also has offices in
Lexington, MA, San Francisco, CA, Princeton, NJ, and in Branford, CT. To learn more,
visit www.valohealth.com.
About Khosla Ventures Acquisition Co.
Khosla Ventures Acquisition Co. ("KVAC") is a special purpose
acquisition company sponsored by affiliates of Khosla Ventures,
LLC. Khosla Ventures manages a series of venture capital
funds that make early-stage venture capital investments and provide
strategic advice to entrepreneurs building companies with lasting
significance. The firm was founded in 2004 by Vinod Khosla, co-founder of Sun
Microsystems. Khosla Ventures has over $14 billion dollars of assets under management
and focuses on a broad range of sectors including artificial
intelligence, agriculture/food, consumer, enterprise, financial
services, health, space, sustainable energy, robotics, VR/AR and 3D
printing. Collectively, Khosla Ventures portfolio of investments
has created nearly half a trillion dollars in market value.
The mission of Khosla Ventures is to be bold, early and
impactful and to partner with new companies seeking to positively
impact the human condition through technology. Khosla Ventures is
an investor and close partner to a number of leading companies in
machine learning and robotics, including Berkshire Grey and
OpenAI. With a special focus on biomedical applications of AI
and automation, Khosla Ventures is continuing to partner with
companies at multiple stages of development, spanning diagnostics
companies like AliveCor in ECG and Caption Health in ultrasound,
through lab automation companies like OpenTrons, into machine
learning driven therapeutics companies like Atomwise and Deep
Genomics.
Additional Information and Where to Find It
This press release relates to a proposed transaction between
Valo and KVAC. This press release does not constitute an offer to
sell or exchange, or the solicitation of an offer to buy or
exchange, any securities, nor shall there be any sale of securities
in any jurisdiction in which such offer, sale or exchange would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. KVAC intends to file a
registration statement on Form S-4 with the SEC, which will include
a document that serves as a prospectus and proxy statement of KVAC,
referred to as a proxy statement/prospectus. A proxy
statement/prospectus will be sent to all KVAC shareholders. KVAC
also will file other documents regarding the proposed transaction
with the SEC. Before making any voting decision, investors and
security holders of KVAC are urged to read the registration
statement, the proxy statement/prospectus and all other relevant
documents filed or that will be filed with the SEC in connection
with the proposed transaction as they become available because they
will contain important information about the proposed
transaction.
Investors and security holders will be able to obtain free
copies of the registration statement, the proxy
statement/prospectus and all other relevant documents filed or that
will be filed with the SEC by KVAC through the website maintained
by the SEC at www.sec.gov.
The documents filed by KVAC with the SEC also may be obtained
free of charge at KVAC's website at
https://khoslaventuresacquisitionco.com/kvsa or upon written
request to Secretary at Khosla Ventures Acquisition Co., 2128 Sand
Hill Road, Menlo Park, California
94025.
Participants in Solicitation
KVAC and its directors and executive officers may be deemed to
be participants in the solicitation of proxies from KVAC's
shareholders in connection with the proposed transaction. A list of
the names of such directors and executive officers and information
regarding their interests in the business combination will be
contained in the proxy statement/prospectus when available. You may
obtain free copies of these documents as described in the preceding
paragraph.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of the federal securities laws with respect to
the proposed transaction between Valo and KVAC, including
statements regarding the anticipated benefits of the transaction,
the anticipated timing of the transaction, expected use of
proceeds, future financial condition and performance of Valo and
expected financial impacts of the transaction (including pro forma
enterprise value and cash balance), the satisfaction of closing
conditions to the transaction, the PIPE transaction, the level of
redemptions of KVAC's public shareholders and expected future
performance and market opportunities of Valo. These forward-looking
statements generally are identified by the words "believe,"
"project," "expect," "anticipate," "estimate," "intend,"
"strategy," "future," "opportunity," "plan," "may," "should,"
"will," "would," "will be," "will continue," "will likely result,"
and similar expressions. Forward-looking statements are
predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a
result, are subject to risks and uncertainties. Many factors could
cause actual future events to differ materially from the
forward-looking statements in this press release, including but not
limited to: (i) the risk that the transaction may not be completed
in a timely manner or at all, which may adversely affect the price
of KVAC's securities, (ii) the risk that the transaction may not be
completed by the business combination deadline and the potential
failure to obtain an extension of the business combination deadline
if sought by either party, (iii) the failure to satisfy the
conditions to the consummation of the transaction, including the
approval of the merger agreement by the shareholders of KVAC, the
satisfaction of the minimum trust account amount following any
redemptions by KVAC's public shareholders and the receipt of
certain governmental and regulatory approvals, (iv) the lack of a
third party valuation in determining whether or not to pursue the
proposed transaction, (v) the inability to complete the PIPE
transaction, (vi) the occurrence of any event, change or other
circumstance that could give rise to the termination of the merger
agreement, (vii) the effect of the announcement or pendency of the
transaction on Valo's business relationships, operating results,
and business generally, (viii) risks that the proposed transaction
disrupts current plans and operations of Valo, (ix) the outcome of
any legal proceedings that may be instituted against Valo or
against KVAC related to the merger agreement or the proposed
transaction, (x) the ability to maintain the listing of KVAC's
securities on a national securities exchange, (xi) changes in the
competitive and regulated industries in which Valo operates,
variations in operating performance across competitors, changes in
laws and regulations affecting Valo's business and changes in the
combined capital structure, (xii) the ability to implement business
plans and other expectations after the completion of the proposed
transaction, and identify and realize additional opportunities,
(xiii) the risk of downturns and a changing regulatory landscape in
the highly competitive drug discovery and development industry, and
(ix) costs related to the transaction and the failure to realize
anticipated benefits of the transaction or to realize estimated pro
forma results and underlying assumptions, including with respect to
estimated shareholder redemptions. The foregoing list of factors is
not exhaustive. You should carefully consider the foregoing factors
and the other risks and uncertainties described in the "Risk
Factors" section of the registration statement on Form S-4
discussed above and other documents filed by KVAC from time to time
with the SEC. These filings identify and address other important
risks and uncertainties that could cause actual events and results
to differ materially from those contained in the forward-looking
statements. Forward-looking statements speak only as of the date
they are made. Readers are cautioned not to put undue reliance on
forward-looking statements, and Valo and KVAC assume no obligation
and do not intend to update or revise these forward-looking
statements, whether as a result of new information, future events,
or otherwise. Neither Valo nor KVAC gives any assurance that either
Valo or KVAC, or the combined company, will achieve its
expectations.
Contact Information
Valo
Media:
Jennifer Hanley, VP Corporate
Communications
jhanley@valohealth.com
Investor Contact:
Graeme Bell, CFO
Gbell@valohealth.com
KVAC
Peter Buckland, CFO
information@khoslaventures.com
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