Mindmaze to take over Babylon Health subsidiaries

Babylon Health was once one of the darlings of the British tech scene. Founded in 2013, its core business is building tele-health networks for digital consultations. Especially during the pandemic, the business grew rapidly. In 2021, Babylon went public through a $4.2 billion special purpose acquisition company (SPAC) merger.  Babylon Health sought to expand globally, but floundered in the process. The share price fell steadily, mainly because the turnaround towards profitability was not visible. In the first quarter of 2023, revenue rose to $311.1 million with a net loss of $63.2 million. Babylon had recorded $266.4 million in revenue and a loss of $29.1 million in the first quarter of 2022.

In early May, Babylon announced plans to take the company private. Now these plans have been firmed up. Babylon has received a proposal from AlbaCore Capital LLP and MindMaze Group SA which it has now accepted. Core operating subsidiaries of Babylon will be transferred to Mindmaze. The Proposed Transaction will not provide for any payment to the Babylon’s Class A ordinary shareholders or other equity instrument holders, as AlbaCore will be exercising rights under its debt agreements with the Company.

The transaction provides for a new capital structure with a significant reduction of pro forma company debt, resulting in a substantially strengthened and more flexible financial profile. In addition, the transaction will include immediate material funding for current business operations as well as a commitment to fund the combined business, allowing the pro forma company to focus on its strategy of delivering concurrent growth and profitability over the near to mid-term.

Babylon and MindMaze believe that the combined entity will form a powerful digital-first global AI-driven healthcare business that will help transform the industry from sick care to predictive and preventative healthcare. Babylon and MindMaze will be dedicated to improving patient engagement and access to high quality optimized healthcare by tackling a broad range of chronic conditions, including but not limited to neurological conditions.

The transaction is expected to close in July 2023. Completion of the transaction will be subject to agreed documentation, various conditions and appropriate regulatory approvals if required. 

Update: On 7 August Babylon Health announced that the transaction proposed by AlbaCore Capital LLP and MindMaze Group SA, for a business combination of Babylon’s core operating subsidiaries with MindMaze, previously announced on June 23, 2023 , will not proceed.

(Press release / SK)