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MSP Recovery SPAC: What do we know about the MSP Recovery SPAC?

The MSP Recovery SPAC will see the healthcare litigation business merge with blank cheque company Lionheart Acquisition Corp II, which recently raised $250 million in its own IPO.

The transaction will mean the combined company is listed on Nasdaq with a potential valuation of $32.6 billion, with the transaction expected for Q4 2021.

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How much is MSP Recovery worth?

MSP Recovery would reportedly be worth an estimated $32.6 billion if all goes to plan with the SPAC, with around $230 million provided by Lionheart Acquisition Corp II.

What does MSP Recovery do?

Started in 2014, MSP Recovery Innovation is a Florida, US-based litigation company focused on recovering secondary insurance payments. Through legal action, it will seek to obtain reimbursements for clients such as government-funded healthcare programs Medicare and Medicaid, as well as commercial insurance and other healthcare organisations, from parties that the company believes should have paid the claims in the first place.

MSP Recovery buys the claims at a steep discount before pursuing the liable parties for the full amount and sharing the proceeds if the litigation succeeds.

CEO John Ruiz says that around 11% of the annual $1.6 trillion Medicaid and Medicare spend is recoverable.

The company has developed algorithms that it says help it identify claims that have been erroneously paid. Effectively, shareholders will receive a stake in the value of these claims upon collection. That said, the company does not generate cash as of yet.

As of August 2021, Crunchbase lists the employee count of the company as 11-50.

Who are MSP Recovery’s competitors?

MSP Recovery has numerous competitors that make money through litigation in the same manner. However, Ruiz believes the algorithm that scours medical records to find suitable claims is the secret weapon to set his company apart from the pack.

How does MSP Recovery make money?

MSP Recovery makes money through recovering Medicare and Medicaid secondary insurance payments, as outlined above. The company is projecting revenues of some $1 billion in 2022, rising to $23 billion in 2026.

Is MSP Recovery profitable?

MSP Recovery is not yet profitable as it does not expect to generate any cash in 2021. Any proceeds of litigation that eventually come in will be shared with the government programs (50%), as well as law firms (up to 20%), with the remainder going to MSP.

What is MSP Recovery's business strategy?

MSP Recovery’s business strategy will, as mentioned, entail the ongoing pursuit of recoverable monies as identified by its algorithms. Most recently in August 2021, the company filed a whistleblower lawsuit against 315 automobile insurers in a bid to recover a sum that could be worth billions of dollars.

MSP Recovery asserts that the companies involved deliberately filed false reports that failed to acknowledge their obligations as required by federal law. The filing has been described as potentially one of the largest whistleblower lawsuits in US history.

The month prior, the company filed a lawsuit against JT Thorpe Settlement Trust, a fund that disperses settlement payments to asbestos injury victims. The move came as the first instalment of a plan to target a range of similar organisations that MSP says failed to divulge settlement payments and deliver reimbursement to health care service providers.

Directors of MSP Recovery

John Ruiz – Chief Executive Officer

Naisleth Rodriguez – Corporate Counsel/Chief Procurement Officer

Eddy Cancela – Vice President, Business Development

Damir Perez – Lead Software Developer

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