Babylon Health is finalizing its decision to go private by accepting a proposal to combine 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 will not provide a pay out to Babylon’s shareholders, which is a condition of AlbaCore's loan facility, according to 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 will be transferred to MindMaze. AlbaCore Capital Group financed a $125 million investment in MindMaze to accelerate 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 expected to close next month. Babylon will stop trading on the New York Stock Exchange, pending regulatory and other approvals. The deal provides a new capital structure and reduces debt, according to a statement from a Babylon spokesperson. Current business operations will receive immediate material funding, the statement said.
The combined company will focus on improving patient engagement and access to high quality optimized healthcare by tackling a broad range of chronic conditions, including neurological ones, according to a news release.
AlbaCore declined further comment. MindMaze did not respond to multiple requests for comment.
Babylon, an artificial intelligence-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. At the time, a Babylon spokesperson said the transaction was expected to bring the company around $575 million in gross proceeds and give it a $4.2 billion valuation.
SPACs streamline the process of a stock market launch, acquiring companies, taking them public and raising money through initial public offerings. SPACs must spend the money they raised within 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 company's revenues had grown by 394% from 2020 to 2021 and by 472% in 2021's first half. Parsa previously predicted the company would be profitable in the near term. "It might be the end of  or the beginning of . It doesn’t matter,” he said at the J.P. Morgan Healthcare Conference in San Francisco in January. “We will break even.”