Vicarious Surgical, D8 Holdings Corp. Combine Operations in $1.1 Billion Deal

Vicarious Surgical Inc. and D8 Holdings Corp. are becoming one entity. The two companies intend to combine operations and operate as Vicarious Surgical Inc., with a New York Stock Exchange ticker symbol “RBOT.”

Vicarious Surgical is a next-generation robotics company developing a disruptive technology with the goal of increasing the efficiency of surgical procedures, improving patient outcomes and reducing healthcare costs. The company was founded in 2014 by experienced roboticists Adam Sachs, co-founder and CEO; Sam Khalifa, co-founder and chief technology officer; and Dr. Barry Greene, co-founder and chief medical officer. Greene is a board certified bariatric and general surgeon with more than 25 years of experience performing advanced laparoscopic surgical procedures. 

“We are excited to announce our partnership with Donald Tang, David Chu and the rest of the D8 team, which we believe will assist in catalyzing the development of our flagship robot and in establishing a foundation of long-term growth for our company,” Sachs said. “Mr. Tang and the D8 team appreciate the potential impact our technology can have on making procedures safer and more available to patients, while simultaneously saving hospitals money and time. We look forward to entering the public markets with the team from D8 at our side.”

Vicarious Surgical’s Executive Chairman David Styka, will serve as board chairman of the combined company. D8 Holdings Co-Founder and President Donald Tang and D8 Holdings Director David Da-I Ho, M.D., will become members of the combined company’s Board of Directors.

Vicarious Surgical’s approach to surgery uses a combination of proprietary, human-like surgical robots and virtual reality to transport surgeons inside the patient when performing minimally invasive surgery. The company’s technology was granted Breakthrough Device Designation by the U.S. Food and Drug Administration (FDA), making it the first and only surgical robot to receive this designation from the FDA. The company is backed by technology luminaries including Bill Gates, Vinod Khosla’s Khosla Ventures, Eric Schmidt’s Innovation Endeavors, Jerry Yang’s AME Cloud Ventures and Philip Liang’s E15 VC.
 
“Seven years ago, we started this company in order to solve the long-standing and persistent issues presented by open surgery, standard minimally invasive surgery and legacy robotic surgery,” said Sachs. “Legacy robotic platforms were introduced with a promise of solving the challenges of open surgery; unfortunately, these legacy robotic platforms have significant limitations including prohibitive cost of adoption, limited mobility and capabilities in the body and required space, set up time and lengthy training. After more than two decades on the market, it is no surprise that legacy robotic penetration is just 3 percent.¹ Our robotic solution has arms that replicate human motion, offering remarkable mobility with nine degrees of freedom per arm with 360-degree visualization, all through a 1.5 cm incision. Our robot can see, reach, and work anywhere inside the abdomen, which effectively shrinks the surgeon and puts her/him inside the human body. Our system fits through a standard door making it portable from operating room to operating room, and does not require a large footprint or facility construction build-out. With cost of goods that are significantly lower than competing products, we believe our robotic solution will offer a cost-effective path to improving patient outcomes and increasing the efficiency of surgical procedures for hospitals and ambulatory surgical centers. We are incredibly proud of the development work we have accomplished to date, which led to our product becoming the first, and only, surgical robot to receive breakthrough designation from the FDA.”²
 
The transaction is expected to deliver up to $460 million of gross proceeds, including up to $345 million of cash held in D8’s trust account (assuming no redemptions are effected). The transaction is further supported by a $115 million private placement of common stock (PIPE), priced at $10 per share, including investment by BD, new institutional investors, and existing investors. Assuming no redemptions, the company is projected to have more than $425 million in cash on the balance sheet after closing. The transaction values the combined company at an enterprise value of approximately $1.1 billion and implies approximately 3.1x 2025 estimated revenue of $355 million.
 
“D8 reviewed numerous investment opportunities in search of an exciting growth company to merge with and Vicarious Surgical impressed us with their visionary team and market disrupting products,” said Tang. “Beyond the technology and the capabilities of Vicarious Surgical’s robot, we were also excited about the positive feedback from surgeons and hospitals. We consider Vicarious Surgical to be a thought leader in the surgical space and we believe the market is ready for surgical robots that drive efficiency and improved quality of patient care. We are excited to work with the Vicarious Surgical team on the next phase of commercialization for their products, bringing what we believe is much needed innovation and choice to patients and practitioners, both in the U.S. and abroad.”
 
The transaction, which was unanimously approved by the boards of directors of both Vicarious Surgical and D8, is subject to approval by D8’s shareholders and other customary closing conditions. The transaction is expected to close in the third quarter of 2021.
 
Credit Suisse is serving as financial advisor and capital markets advisor to Vicarious Surgical. Credit Suisse is also serving as exclusive placement agent on the private offering. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. are serving as legal counsel to Vicarious Surgical.
 
UBS Investment Bank is serving as capital markets advisor to D8 and acted as the sole book-running manager for the D8’s IPO in July 2020. White & Case LLP is serving as legal counsel to D8.

References
¹ Vicarious Surgical estimates from data sourced from LSI Market Size Analysis and public filings
² As of the date of this press release, Vicarious Surgical is not aware of any surgical robotics company that has announced receiving Breakthrough Designation for a full robotics system.