ETAO International Group said on Friday it will go public through a merger with a blank-check company, in a deal that values the digital healthcare company at $2.5 billion.

The deal with Mountain Crest Acquisition Corp III will provide the combined company with up to $304 million in gross proceeds, including a $250 million private investment from China SME Investment Group.

ETAO provides a range of online and offline healthcare services in China, including hospital and primary care, health insurance, pharmacy and telemedicine.

Telemedicine involves doctor consultations and other medical services over the internet or the phone without requiring a person to visit a clinic in-person.

Funds from the deal with the special purpose acquisition company (SPAC) will be used to improve healthcare delivery amenities in its clinics and hospitals and also towards its internet-based medical services, ETAO said.

Blank-check firms, or SPACs, are publicly listed shell companies that raise funds to merge with a private company, thereby taking it public and allowing it to bypass the scrutiny that comes with a traditional IPO.

Despite the recent downturn of company listings through SPAC mergers and shares of popular firms like BuzzFeed Inc and Grab Holdings tumbling after going public, the alternative route to list has remained popular this year.

Earlier this week, Akili Interactive, a company that has developed video games to treat attention-deficit disorders, agreed to go public by merging with a Chamath Palihapitiya-backed blank-check firm in a $1 billion deal. 

The ETAO deal is expected to close in the summer, following which the combined company will list on the New York Stock Exchange under the trading symbol "ETAO".

(Reporting by Manya Saini and Sohini Podder in Bengaluru; Editing by Krishna Chandra Eluri) ((;))