ETAO International Group to Become Publicly Traded Global Digital Healthcare Platform via Merger with Mountain Crest Acquisition Corp. III (MCAE)

January 28, 2022 8:01 AM EST

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ETAO International Group ("ETAO"), a digital healthcare group providing telemedicine, hospital care, primary care, pharmacy and health insurance covering all life stages of patients, is to go public, raising up to $304 million, assuming no redemptions by Mountain Crest III shareholders, to advance its best-in-class internet medical services, supported by artificial intelligence and big data technologies, to improve health care delivery and quality in specialized clinics and hospital settings. ETAO has entered into a definitive merger agreement with Mountain Crest Acquisition Corp. III (Nasdaq: MCAE; “Mountain Crest III”), a publicly traded special purpose acquisition company or SPAC. The transaction values ETAO at a pro forma fully diluted enterprise value of approximately $2.5 billion with existing ETAO shareholders rolling over 100% of their equity into equity of the combined company. Upon completion of the transaction, which is anticipated in the summer of 2022, the combined company will operate as ETAO and securities are expected to be listed on NYSE under the symbol “ETAO.”

The transaction includes a $250 million private investment in public equity (PIPE) at $10 per share from thought-leading investor China SME Investment Group that is scheduled to close simultaneously with the business combination transaction. Separately, ETAO has also received commitments through a separate private placement of $51 million expected to close prior to February 15, 2022.

ETAO OverviewETAO has developed a healthcare ecosystem leveraging a technology platform that allows it to extend the reach of traditional healthcare services beyond the hospital wall to reach patients in modern clinical facilities in distant communities and even in their homes. However, China’s healthcare system is at the developing stage with still many issues to be overcome. Through ETAO’s online and offline ecosystem, supported by a network of bilingual, highly trained international specialists, the company is able to deliver medical services and quality care for Chinese patients via telemedicine and other services powered by technology.

Management Comments

Wilson Liu, Chairman and CEO of ETAO, welcomed the signing of the agreement between Mountain Crest III and ETAO, saying, “ETAO aims to become the world’s leading digital healthcare group—providing transformative medical care and quality service. We want to be a good company by doing the right thing—an unwavering commitment to always do our best for our patients, partners, and communities. The partnership with Mountain Crest will enable us to expand more rapidly and bring many more talented clinicians and more advanced telemedicine technologies to bear on our commitment to better healthcare delivery to the Chinese population.”

Dr. Lee Winter, President of ETAO commented, “A business combination would be an important step for ETAO in realizing our goal of becoming a leading provider of modern, patient-centric healthcare services. Mountain Crest’s understanding of our market and of our global strategy makes them an ideal partner to accompany us during our rapid growth.”

Dr. Suying Liu, Chairman, CEO and CFO of Mountain Crest III commented, “I am thrilled to take the third SPAC of our Mountain Crest franchise to the next phase of the deal process. ETAO is a compelling investment opportunity, with its team’s track record of founding and running successful companies for large addressable markets. The secular tailwinds in the telehealth sector further add to its significant growth potential.”

Key Transaction Terms

The transaction, which has been unanimously approved by the Boards of Directors of ETAO and Mountain Crest III, is subject to approval by ETAO’s stockholders, Mountain Crest III’s stockholders and other customary closing conditions. The proposed business combination is expected to be completed in the summer of 2022.

A more detailed description of the transaction terms and a copy of the definitive merger agreement will be included in a Current Report on Form 8-K to be filed by Mountain Crest III with the United States Securities and Exchange Commission ("SEC"). Mountain Crest III or one of its subsidiaries will file a registration statement (which will contain a proxy statement and prospectus) with the SEC in connection with the transaction.

Advisors

Revere Securities LLC is acting as capital markets advisor to Mountain Crest III. Sichenzia Ross Ference LLP is acting as legal counsel to ETAO in the transaction. Loeb & Loeb LLP is acting as legal counsel to Mountain Crest III.

Investor Presentation

A presentation made by the management team of ETAO regarding the transaction will be filed by Mountain Crest III with the SEC in a Current Report on Form 8-K, which will be accessible at www.sec.gov.

About ETAOETAO International Group ("ETAO") aims to be a leading digital healthcare group providing telemedicine, hospital care, primary care, pharmacy and health insurance covering all life stages of patients. "ETAO" brand means "Best Medical Way" with transformative medical care and unparalleled service. ETAO provides best-in-class internet medical services, supported by artificial intelligence and big data technologies, to improve health care delivery and quality in specialized clinics and hospital settings. ETAO’s platform is seamlessly integrated because of its ability to combine technology and health sciences. For more information, visit: www.etaoyun.cn

About Mountain Crest Acquisition Corp. IIIMountain Crest Acquisition Corp. III (”Mountain Crest III”) is a blank check company formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Mountain Crest III’s efforts to identify a prospective target business are not limited to a particular industry or geographic region.



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