DURHAM – Special Purpose Acquisition Companies (SPACs), the hottest financial craze to hit Wall Street for taking companies public, is hitting the Triangle with news early Wednesday that Durham-based life science firm Humacyte has chosen the SPAC vehicle for its stock offering.

Humacyte, which focuses on regenerative medicine and is creating engineered living tissue replacements, says it is teaming with Alpha Healthcare Acquisition Corp for a deal that includes $175 million committed financing.

Its stock will trade on the Nasdaq Capital Market under the ticker symbol “HUMA.” The deal is expected to close in the second quarter.

Alpha Healthcare is a special purpose acquisition company, or SPAC.

SPACs are publicly traded companies that are organized for the sole purpose of acquiring another business, not to conduct their own business.  They are sometimes called ”blank check” companies, because when the SPAC raises money in its IPO investors don’t know the specific business the SPAC will acquire.

The deal gives Humacyte a $1.1 billion market cap, including $255 million cash and a valuation of $800 million, Humacyte says. The company has 130 employees.

Humacyte

Humacyte shareholders will receive some 80 million shares of AHAC’s Class A common stock in exchange for their existing Humacyte shares, the companies said. AHAC shares traded at just over $10 on Tuesday.

“Humacyte is a global leader in developing bioengineered tissues for use in regenerative medicine,” said Laura Niklason, Humacyte’s CEO who will continue to lead the company.

“We are very pleased to have support from top-tier investors, and access to the U.S. capital markets following the closing of this proposed transaction, which will leave Humacyte well-capitalized to provide first-in-class therapies to treat several life-threatening diseases. Our innovative platform has the potential to support tissue repair, reconstruction and replacement without the limitations of existing standards of care. Humacyte’s bioengineered tissues can be produced at commercial scale and, after regulatory approval, are designed to be stored in hospitals and other surgical centers, and immediately available to surgeons whenever needed.”

Said Rajiv Shukla, the chairman and CEO of AHAC who has been involved in other SPAC business, cited three reasons for working with Humacyte:

“Humacyte’s innovative biotechnology platform is aimed at solving intractable medical problems for:

1. “Patients: potential for lower risk of amputation and tissue rejection, elimination of waiting times, and reduced need for immunosuppression and additional surgeries

2. “Physicians: potential for better clinical outcomes and ease of use

3. “Payors: potential cost savings by avoiding amputations and infections, additional surgeries, medication and re-hospitalizations.”

(This story will be updated.)

What’s a SPAC? And why are they the hottest deals going on Wall Street?