Babylon Health is finalizing its decision to go private by accepting a proposal to mix with MindMaze, a digital health company focused on brain health.
The proposal comes from London-based investment manager AlbaCore Capital Group, which secured a term loan facility for Babylon Health in November 2021. The transaction won’t provide a pay out to Babylon’s shareholders, which is a condition of AlbaCore’s loan facility, in accordance with a regulatory filing with the Securities and Exchange Commission. The initial agreement between AlbaCore and Babylon issued Babylon $200 million through 2026.
Babylon’s core operating subsidiaries might be transferred to MindMaze. AlbaCore Capital Group financed a $125 million investment in MindMaze to speed up its commercialization and expansion of a digital neurotherapeutics platform in October 2021, one month before it secured the loan for Babylon.
The transaction with MindMaze is anticipated to shut next month. Babylon will stop trading on the Recent York Stock Exchange, pending regulatory and other approvals. The deal provides a latest capital structure and reduces debt, in accordance with a press release from a Babylon spokesperson. Current business operations will receive immediate material funding, the statement said.
The combined company will concentrate on improving patient engagement and access to prime quality optimized healthcare by tackling a broad range of chronic conditions including neurological conditions, in accordance with a news release.
AlbaCore declined to further comment. MindMaze didn’t reply to multiple requests for comment.
Babylon, an AI-enabled virtual diagnosis and medical appointments company founded in 2013 in London, went public in October 2021 through a special purpose acquisition corporation merger with Alkuri Global Acquisition Corp. On the time, a Babylon spokesperson said the transaction was expected to bring the corporate around $575 million in gross proceeds and give it a $4.2 billion valuation.
SPACs streamline the strategy of a stock market launch, acquiring corporations, taking them public and raising money through initial public offerings. SPACs must spend the cash they raised inside two years or return it to investors.
Babylon opened at $250.25 per share and the stock climbed as high as $292.75 per share on Oct. 27, 2021. On Friday afternoon, its stock traded around 48 cents per share, a 22% decrease from its opening day price of 61 cents per share.
Babylon CEO Dr. Ali Parsa wrote in October 2021 the corporate’s revenues had grown by 394% from 2020 to 2021 and by 472% in 2021’s first half. Parsa previously predicted the corporate can be profitable within the near term. “It may be the tip of [2024] or the start of [2025]. It doesn’t matter,” he said on the J.P. Morgan Healthcare Conference in San Francisco in January. “We’ll break even.”
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