Artemis Strategic (ARTE) to Combine with Danam Health in $200M Deal

Artemis Strategic Investment Corporation (NASDAQ:ARTE) has entered into a definitive agreement to combine with Danam Health at a pro forma enterprise value of $200 million.

Lutz, Florida-based Danam operates a technology division with a proprietary digital health and medication adherence platform along with a pharmaceutical wholesale division that serves all 50 states.

The combined company is expected to trade on the Nasdaq in the fourth quarter of 2023.

Transaction Overview

Artemis Strategic has about $22 million in its current trust after seeing 89% of shares redeemed in a June extension vote. This gave it the right to extend its transaction deadline up to April 4 in exchange for contributions to its trust.

Danam Health shareholders will have the opportunity to earn up to $30 million in additional shares as a contingent consideration that may be adjusted based on the company’s available cash and debt at close.

Artemis Strategic’s sponsor has subjected a portion of its promote shares to undisclosed vesting conditions. The parties have not yet released their merger documents or an investor presentation, but Artemis Strategic’s profile page will be updated with full terms once they are made available.

Quick Takes: There hasn’t been much discussion about anointing a new SPAC King since Chamath Palihapitiya has taken a step away from the kingdom at least temporarily.

But, if there is to a be fresh coronation in 2023, the heir with the strongest claim to the throne might now be Suren Ajjarapu by sheer deal volume alone. He is CEO of Danam Health, but that is far from all – this the fifth SPAC transaction to either be announced or closed under his stewardship this year.

He announced a SPAC deal at the end of June as CEO of Semper Paratus (NASDAQ:LGST). It rolled out its proposed combination with Tevogen Bio a few weeks after its sponsor economics were bought out by VKSS Associates and Ajjarapu was appointed.

Ajjarapu is also CEO of OceanTech I (NASDAQ:OTEC), which announced a combination with biotech firm Regentis one month earlier in May and Kernel (NASDAQ:BIOT), which announced a deal with air mobility firm AIRO in March. Just a month before that, Ajjarapu-led Aesther Healthcare completed its combination with Ocean Biomedical (NASDAQ:OCEA).

He is also the founder, Chaiman and CEO of TRxADE Health (NASDAQ:MEDS) and the founder, Chairman and CEO of International Biofuels, which is appears to still be private, but it’s probably a safe bet it will come up in SPAC news soon.

But, while it’s clear Ajjarapu is adept at wearing a variety of hats at once, this latest one he’s wearing as CEO as Danam Health is perhaps the most enigmatic. There is no mention of it on his LinkedIn profile or in any of the recent bios he’s appended to recent SPAC documents.

Danam Health’s website also appears freshly made, with placeholder text for all but one of its officers listed on its executive leadership team. The positions of CEO and COO are listed as “First Last” and described as “Them is a versatile and accomplished individual with a passion for [area of expertise or interest]. With a strong background in [relevant field], […]” etc.

Ajjarapu does appear on the website’s “Board Members & Advisors” page alongside COO and President Prashant Patel and four other individuals also listed as “Chief Operating officer & President” without photos and the same “They are a versatile and accomplished […]” bio text.

But, the names there are familiar to SPAC world, or should we say Ajjarapu’s world. Along with Patel, three of the four – Mike Peterson, Don Fell, and Jeff Newell – are listed either as officers and directors at TRxADE Health and/or Ajjarapu’s recent SPACs.

Doss, Peterson and Fell were appointed to Kernel along with Ajjarapu and all were also officers or directors of Aesther Healthcare. Doss was the only one left out of OceanTech I’s post-takeover team. Frank Knuettel served in Doss’ place as CFO of OceanTech I and he is also the sole member of Danam Health’s leadership team pictured on its website, appearing in the same role.

Of course there’s nothing wrong with having a trusted team for repeat deals. But, it does begin to raise some questions when the same names keep showing up on both sides of deals and, in this case, it appears things moved so fast that there wasn’t time to complete a website for the target company.

What is clear is that the new company looks a lot like the old company. In addition to sharing an executive team, Danam’s listed address “2420 Brunello Trace, Lutz, FL 33558” – a small two-story building in a Florida cul-de-sac – is same as TRxADE Health lists as its headquarters.

The two companies also describe their companies very similarly:

“Trxade Health, Inc. (NASDAQ: MEDS) is a health services IT company focused on digitalizing the retail pharmacy experience by optimizing drug procurement, the prescription journey, and patient engagement in the U.S.”

And;

“Danam Health, Inc. (“Danam”), a health services technology and pharmaceutical distribution company pioneering a healthcare ecosystem model designed to bring efficiency to the prescription journey and promote medication compliance”.

There are some differences. TRxADE Health claims to serve about 12,700 members through its drug procurement marketplace, which operates under the Bonum Health brand. Danam, meanwhile, further describes itself as reaching 4,500 network pharmacies through its model that mixes a digital platform with wholesale distribution for overall cheaper prescriptions.

It is also quite possible that Danam is intended to be a spinoff of some of TRxADE Health’s divisions or IP, but it is odd that TRxADE Health is not mentioned in any of Danam’s announcement materials.

Artemis Strategic still has plenty of time to fill in the gaps with further filings and disclosures. In the meantime, Ajjarapu’s prolific SPAC activity seems to keep getting closer to home.

ADVISORS

• Company Advisors:
  • Nelson Mullins Riley & Scarborough LLP is serving as legal counsel
• SPAC Advisors:
  • Ellenoff Grossman & Schole LLP is serving as legal counsel