What happened

2020 was the year of the SPAC, but 2021 is shaping up to be just as strong in the world of so-called blank check companies. One particular standout today is VG Acquisition Corporation (VGAC.U), which is sponsored by Richard Branson's Virgin Group. As of 11:45 a.m. EST, VG Acquisition was higher by more than 10% for the day.

So what

The reason for today's move is that we learned what company VG Acquisition is planning to take public, and it is DNA-testing company 23andMe.

Scientist doing DNA testing in a lab.

Image source: Getty Images.

The deal values the company at about $3.5 billion, including the roughly $750 million influx of new capital 23andMe will get as part of the arrangement. VG Acquisition raised a little more than $500 million in its 2020 IPO, and there's also a $250 million PIPE (private investment in public equity) that includes a $25 million investment from Branson himself.

The deal is expected to close in the second quarter of 2021, and the combined company will change its ticker symbol to ME.

Now what

23andMe is best known for its consumer genetic testing kits, but there's a lot more to the company. Specifically, in its years of selling genetic kits, it has accumulated a massive amount of genetic data. It has a partnership with pharmaceutical giant GlaxoSmithKline (GSK -0.34%) to leverage its data to develop new drugs with applications including oncology as well as respiratory and cardiovascular diseases. And after the SPAC merger is complete, 23andMe will have more than $900 million in cash to help fund its growth into these new and exciting areas.