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Babylon merger called off: now looking to divest UK business and exit core US business




Exec Summary:


Babylon/MindMaze merger proposed by AlbaCore Capital LLP has been called off, will no longer proceed as previously announced.


Babylon is in discussions with a number of new parties looking at new strategic alternatives for its businesses in both the UK and US.


Babylon is pursuing the divestiture of its UK business to third parties that may provide financing to assure the continuity of the operations.


Press release stated ... "Babylon Holdings Limited (OTC Pink: BBLNF) (“Babylon”, and together with its subsidiaries, the “Group”) today announced that the transaction proposed by AlbaCore Capital LLP (“AlbaCore”) and MindMaze Group SA (“MindMaze”), for a business combination of Babylon’s core operating subsidiaries with MindMaze, previously announced on June 23, 2023 (the “Previously Proposed Transaction”), will not proceed.


Following Babylon’s receipt of funding under its amended bridge notes facility with AlbaCore, Babylon has no binding commitment for additional financing to continue its business operations. As a result, the Group is exploring new strategic alternatives in order to find the best possible outcome for its UK business. Babylon remains focused on continuing the day to day operations of its UK business, providing accessibility of its healthcare services and the highest standards of care for its patients and members.


The Group is pursuing the divestiture of its UK business to third parties that may provide financing to assure the continuity of the operations. Babylon has built a successful, distinct and sustainable UK business which provides high quality healthcare to many. However, it cannot provide assurance that any of these initiatives will result in Babylon entering into a definitive agreement for or completing a divestiture.


Further, Babylon is exiting its core US business and plans to safely transition its US members to other providers, and continues to pursue its previously disclosed process for the sale of the Meritage Medical Network independent physicians association business (the “IPA Business”, and the sale of the IPA Business, the UK business or another particular business of Babylon is referred to as a “Third Party Sale”).


In order to explore these opportunities for a Third Party Sale and enable business continuity, Babylon is in discussions with potential strategic partners to secure additional funding. Babylon cannot provide assurance that it will be able to secure sufficient liquidity to fund the operations of the Group’s businesses.


To the extent that Babylon is unable to secure additional financing and complete a Third Party Sale of a particular business, the applicable entities of the Group will file for bankruptcy protection or implement other alternatives for an orderly wind down and liquidation or dissolution, which may include commencing Chapter 7 proceedings under the U.S. Bankruptcy Code and/or a UK administration for the applicable entities of the Group in the near term.


Any Third Party Sale will be subject to AlbaCore’s rights under its debt agreements with Babylon, and the aggregate proceeds of any Third Party Sales are not expected to exceed the total amount of the Group’s indebtedness to AlbaCore. As a result, any such transaction will not provide for any payment to Babylon’s Class A ordinary shareholders and other equity instrument holders."



Merger Announcement on June 23rd 2023


Babylon Holdings Limited (NYSE: BBLN) has agreed to the recapitalisation and take private proposal from AlbaCore Capital LLP which will result in a merger with Swiss based MindMaze Group SA.


In combination with MindMaze, a global leader in brain technology and digital neurotherapeutic solutions for brain health and recovery, the new entity is positioned to uniquely address patient and member needs across the continuum-of-care, from healthcare through sick care.


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.


Babylon and its management will continue to operate and deliver on its existing business plan. Over the mid-to-long term Babylon and MindMaze intend to align the strengths of their organisations to deliver a truly novel care paradigm and deliver exceptional outcomes for all stakeholders.


The transaction is expected to close in July 2023 and will not provide for any payment to Babylon Holdings Limited’s Class A ordinary shareholders or other equity instrument holders, as AlbaCore will be exercising rights under its debt agreements with Babylon, and the go-forward private business will be transferred to private ownership.


Therefore, the transaction would transfer core operating subsidiaries of Babylon to MindMaze, and Babylon Holdings Limited’s Class A ordinary shares will cease trading on the NYSE under the ticker symbol ‘BBLN’.



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AlbaCore Capital Group


AlbaCore Capital Group is a European investment firm and bespoke solutions provider, focusing on private debt and opportunistic credit investments. The firm was founded in 2016 by David Allen, Bill Ammons, and Deborah Cohen Malka, who previously worked together in the Canada Pension Plan Investment Board's Principal Credit Investments business in London.


AlbaCore's core investment team has over 30 years of experience in the credit markets, and the firm has a track record of investing in and managing a wide range of credit strategies, including direct lending, collateralized loan obligations (CLOs), and distressed debt.

The firm has offices in London, Dublin, and New York, and manages over $19 billion in assets. AlbaCore's clients include institutional investors, family offices, and high-net-worth individuals.


The firm's investment philosophy is to focus on the long term and to build relationships with its portfolio companies. AlbaCore seeks to invest in companies that have strong management teams, sustainable business models, and the potential for growth.


The firm's recent investments include Babylon Health, MindMaze, and Just Eat Takeaway.com. AlbaCore has also been active in the CLO market, and has priced five CLOs since 2017.


AlbaCore is a leading alternative investment manager in Europe, and its track record and investment philosophy have attracted a strong following from institutional investors. The firm is well-positioned to continue to grow in the years to come.


Here are some of the key facts about AlbaCore Capital Group:

  • Founded in 2016

  • Headquarters in London

  • Offices in Dublin and New York

  • Over $19 billion in assets under management

  • Investment focus: private debt and opportunistic credit

  • Investment philosophy: long-term oriented, relationship-driven

  • Recent investments: Babylon Health, MindMaze, Just Eat Takeaway.com

  • Track record: consistently outperformed the market in the long term


MindMaze

MindMaze is a global leader in the development of AI-driven digital neurotherapeutics. The company's mission is to "empower people to recover and improve their brain function through innovative technologies."


MindMaze's technology platform combines virtual reality, brain-computer interfaces, and artificial intelligence to create personalised, immersive, and engaging experiences that help patients recover from neurological injuries and diseases. The company's products are used by patients, clinicians, and researchers in over 100 countries around the world.


Some of MindMaze's most notable products include:

  • Muse: A brain-computer interface headband that helps users improve their focus, attention, and relaxation.

  • Infinity: A virtual reality platform that helps patients with stroke, Parkinson's disease, and other neurological conditions regain motor function.

  • Izar: A smart peripheral that helps patients with hand dexterity impairment improve their hand function.

MindMaze's technology has been shown to be effective in a number of clinical trials. For example, a study published in the journal Neurology found that patients with stroke who used MindMaze's Infinity platform for 6 weeks showed significant improvements in their motor function.


MindMaze is a privately held company headquartered in Lausanne, Switzerland. The company was founded in 2012 by Tej Thakur, Jaggi Sidhu, and Dr. Gerwin Schalk. MindMaze has raised over $100 million in funding from investors such as SoftBank Vision Fund, Fidelity Investments, and Robert Bosch Venture Capital.


MindMaze is a rapidly growing company with a bright future. The company's technology has the potential to revolutionize the way we treat neurological injuries and diseases. With continued investment and development, MindMaze could become one of the leading players in the digital health industry.


Here are some of the key benefits of MindMaze's AI-driven digital neurotherapeutics:

  • Personalized: The company's technology is personalized to each individual patient, based on their specific needs and goals.

  • Immersive: The company's products use virtual reality and other immersive technologies to create a more engaging and effective therapy experience.

  • Engaging: The company's products are designed to be engaging and motivating, which helps patients stay motivated to continue with their therapy.

  • Effective: The company's technology has been shown to be effective in a number of clinical trials.

Background to the merger: VR, clinical trials and stroke patients


Babylon Health and MindMaze are two leading companies in the digital health space. Babylon Health is a telemedicine company that provides users with access to healthcare professionals through a mobile app. MindMaze is a company that develops AI-driven digital neurotherapeutics.


The two companies have partnered to develop a new product called Babylon MindMaze. This product combines Babylon Health's telemedicine platform with MindMaze's AI-driven neurotherapeutics to provide patients with a more personalized and effective way to manage neurological conditions.


Babylon MindMaze is currently being used in a clinical trial in the United Kingdom. The trial is evaluating the effectiveness of the product in treating patients with stroke. The results of the trial are expected to be released in 2023.


If the trial is successful, Babylon MindMaze could have a significant impact on the way we treat neurological conditions. The product could help patients recover more quickly and effectively from stroke and other neurological injuries and diseases.


Here are some of the key benefits of the Babylon MindMaze partnership:

  • Personalized: The product is personalized to each individual patient, based on their specific needs and goals.

  • Immersive: The product uses virtual reality and other immersive technologies to create a more engaging and effective therapy experience.

  • Engaging: The product is designed to be engaging and motivating, which helps patients stay motivated to continue with their therapy.

  • Effective: The product is based on MindMaze's AI-driven neurotherapeutics, which have been shown to be effective in clinical trials.


Looking to the future, the next chapter for Babylon


The future of Babylon Health and MindMaze clinical trials is bright. The two companies are working on a number of promising projects that have the potential to revolutionize the way we treat neurological conditions.


One of the most exciting projects is the development of a digital rehabilitation platform for patients with stroke. The platform combines Babylon Health's clinical expertise with MindMaze's AI-driven technology to create a personalized and immersive rehabilitation experience.


The platform is still in development, but it has the potential to revolutionize the way stroke patients are treated. By combining clinical expertise with AI-driven technology, the platform can provide patients with a more effective and engaging rehabilitation experience.


Another promising project is the development of a digital platform for patients with Parkinson's disease. This platform will use MindMaze's AI-driven technology to help patients improve their motor function.


The Babylon Health and MindMaze clinical trials are still in the early stages, but they have the potential to make a significant impact on the lives of patients with neurological conditions. The two companies are working hard to develop these platforms and bring them to market.


Here are some of the key factors that could influence the future of Babylon Health and MindMaze clinical trials:

  • The success of the current clinical trials. If the trials are successful, it will provide strong evidence that the platforms are effective and safe. This will make it more likely that the platforms will be approved for use by regulatory agencies.

  • The development of new AI-driven technologies. As AI-driven technologies continue to develop, they could be used to improve the effectiveness and efficiency of the platforms. This could make the platforms more attractive to patients and healthcare providers.

  • The growth of the digital health market. The digital health market is growing rapidly, and this could create a larger market for the platforms. This could make it more feasible for Babylon Health and MindMaze to develop and market the platforms.

Engage with the HealthTech Community


HealthTech M&A Newsletter from Nelson Advisors - Market Insights & Analysis for Founders & Investors. Subscribe today! https://lnkd.in/e5hTp_xb


HealthTech M&A Advisory by Founders for Founders, Owners & Investors. Buy Side, Sell Side, Growth and Strategy mandates - Email lloyd@nelsonadvisors.co.uk


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