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Billionaire Richard Branson has invested in everything from commercial space travel to record labels. Now he is getting into the human genome business.

His blank-check special-purpose company, VG Acquisition Corp. (ticker: VGAC), is merging with the gene-testing company 23andMe and will list it publicly on the New York Stock Exchange under the ticker ME. Under the deal, which values the company at around $3.5 billion, existing shareholders of the gene-testing firm will own 81% of the business.

Branson and Anne Wojcicki, the CEO of 23andMe, will each invest $25 million in a $250 million private investment in public equity, or PIPE. Other investors include funds managed by Fidelity, Altimeter Capital, Casdin Capital, and Foresite Capital. It is expected to close in the second quarter.

The transaction will bring 23andMe gross proceeds of up to $759 million, according to a statement disclosing the deal. That includes the $250 million PIPE and up to $509 million in a VG Acquistion trust account.

For Branson, it is a foray into the booming health-care services industry. 23andMe sells an at-home testing kit that has become popular with consumers who want to learn about their genetic backgrounds. The information can reveal details about genetic health risks in addition to ancestry.

Test users also have the option to participate in genetic research, which 80% accept. The insights from this research can be used to develop future therapies for cancer, heart, and lung disease, among others, the company said.

We have a huge opportunity to help personalize the entire experience at scale, allowing individuals to be more proactive about their health and wellness, said Wojcicki. Through a genetics-based approach, we fundamentally believe we can transform the continuum of healthcare.

Branson said in the same statement that he was excited to see 23andMe make a positive difference to more people.

Consumer genetic testing fits into the growing segment of personalized medicine and health care. Its also an area of controversy over privacy issues.

In 2018, 23andMe joined forces with GlaxoSmithKline (GSK) in a four-year project to use the genetic data 23andMe gathers to develop new drugs.

VG Acquisition shares jumped more than 14% on Thursday, compared with a 0.9% gain in the S&P 500.

Write to Liz Moyer at Liz.Moyer@barrons.com

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Richard Bransons SPAC to Merge With Gene-Testing Firm 23andMe - Barron's