Babylon Health said Monday its proposed deal to go private with MindMaze, a digital health company focused on brain health, will not move forward.
Babylon, an artificial intelligence-enabled virtual diagnosis and medical appointments company, announced the would-be deal to go private and combine with MindMaze in June. The deal was proposed by London-based investment manager AlbaCore Capital Group, which secured a term loan facility for Babylon in November 2021.
Babylon did not specify in a news release why the transaction fell through. A spokesperson for Babylon declined to comment beyond the news release. Representatives for MindMaze did not respond to a request for comment. A spokesperson for AlbaCore declined to comment.
Babylon, which has primarily garnered revenue through value-based care membership agreements with health plans, said in the release it will exit its core U.S. business. The company said it will transition its U.S. members to other providers. It will continue with the sale of Meritage Medical Network, an association of approximately 1,800 doctors providing physical care in California, which it announced in October.
The company did not immediately respond to a request for comment regarding the potential sale of its U.S. clinical services and software licensing businesses.
Babylon also said it is aiming to sell its U.K. business to ensure it can continue operations in the country.
If no deal is reached to divest or Babylon can’t secure additional funding, the company said in the release it will have to file for bankruptcy protection or find another way to wind down operations. Any sale to a third party will have to be cleared by AlbaCore based on the debt agreements, and sale proceeds aren't expected to exceed Babylon's debt to AlbaCore.
Babylon, 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.
In January, CEO Ali Parsa predicted the company would be profitable in the near term. "It might be the end of [2024] or the beginning of [2025]. It doesn’t matter,” he said at the J.P. Morgan Healthcare Conference in San Francisco in January. “We will break even.”
