Babylon Holdings Limited (Babylon), a world leading, digital-first value-based care company, and Alkuri Global Acquisition Corp. (Alkuri Global), a special purpose acquisition company, announced that they have entered into a definitive merger agreement. Upon closing of the transaction, the combined company will operate as Babylon and plans to trade on Nasdaq under the new symbol “BBLN”. The transaction reflects an initial pro forma equity value of approximately $4.2 billion. The transaction is expected to close in the second half of 2021.
Babylon was founded in 2013, with the mission to put accessible and affordable quality healthcare in the hands of every person on Earth. Babylon is poised to re-engineer the $10 trillion global healthcare market to better align systemwide incentives and shift the focus from reactive sick care to preventative healthcare, resulting in better member health, improved member experience and reduced costs. Babylon helps consumers through two primary channels — Babylon 360, its digital-first value-based care service; and Babylon Cloud Services, a suite of digital self-care tools that enables consumers and primary care professionals to gain insights and information either through Babylon directly or through Babylon’s roster of top-tier partners. Combined, those services cover 24 million people across the United States, Canada, Europe, Africa and 13 countries in Asia. In 2020, the company had approximately 6 million consumer interactions. Moreover, Babylon has a 95% user retention rate and a 5-star rating from more than 90% of its users.
Supported by capital raised through the transaction, Babylon will continue to expand its services both with existing and new consumers. Babylon has achieved strong traction in the U.S. market and is focused on building on this momentum by rapidly scaling its operations.
The transaction is expected to deliver up to $575 million of gross proceeds to fund Babylon’s pro forma balance sheet, including the contribution of up to $345 million of cash held in Alkuri Global’s trust account assuming no redemptions. The combination is further supported by a $230 million private placement (the PIPE) – funded over 85% from new, external institutional investors including AMF Pensionsförsäkring, Sectoral Asset Management and Swedbank Robur with strategic investor Palantir – at $10.00 per share. There is additional participation from Ali Parsa, Alkuri Sponsor LLC and existing Babylon investors Kinnevik and VNV Global. In addition, Babylon previously acquired an option to purchase Higi, a consumer health engagement company, and intends to acquire the remaining Higi equity stake it does not already own. The major investors in Higi, including 7wire Ventures, Flare Capital Partners and William Wrigley, Jr., have agreed to accept shares in lieu of a portion of cash consideration if Babylon exercises its option. This agreement is expected to reduce Babylon’s cash needs by approximately $40 million.
Assuming no redemptions, taking existing cash and transaction fees into account, Babylon is expected to have approximately $540 million net cash on its balance sheet following the transaction, which will be used to pursue organic growth strategies as well as attractive and opportunistic acquisitions. The transaction reflects an initial pro forma equity value of approximately $4.2 billion and enterprise value of approximately $3.6 billion. Existing Babylon shareholders will roll 100% of their equity into the combined company and will own approximately 84% of the pro forma company at closing.
The transaction, which has been unanimously approved by the Boards of Directors of both Babylon and Alkuri Global, is expected to close in the second half of 2021, subject to approval by Alkuri Global’s stockholders and other customary closing conditions, including any applicable regulatory approvals. Following the closing of the proposed business combination, Babylon will retain its experienced management team. Dr. Parsa will continue to serve as Chief Executive Officer and Chairman of the Board. An Alkuri Global representative will join the Babylon Board of Directors.
Ardea Partners LP is serving as financial advisor, Citi is serving as financial and capital markets advisor, and Wilson Sonsini Goodrich & Rosati, P.C., Allen & Overy LLP and Walkers (Jersey) LLP are serving as legal counsel to Babylon. Jefferies is serving as exclusive financial advisor and Winston & Strawn LLP is serving as legal counsel to Alkuri Global. Jefferies, Citi, and Pareto Securities AB served as placement agents on the PIPE.
Babylon is a world leading, digital-first, value-based care company whose mission is to make high-quality healthcare accessible and affordable for everyone on Earth. Babylon is re-engineering healthcare, shifting the focus from sick care to preventative healthcare so that consumers experience better health, and reduced costs. This is achieved by leveraging a highly scalable, digital-first platform combined with high quality, virtual clinical operations to provide all-in-one, personalized healthcare. Babylon endeavors to keep consumers at the peak of health and get them back on their feet as quickly as possible, all from their devices, with the aim to promote longer and healthier lives. When sick, Babylon provides assistance to navigate the health system, connecting consumers digitally to the right primary care professional 24/7, at no additional cost. Founded in 2013, Babylon has since delivered millions of clinical consultations and AI interactions, with c.2m clinical consultations and c.3.9m AI interactions in 2020 alone. Babylon works with governments, health provider organizations and insurers across the globe, and support healthcare facilities from small local practices to large hospitals.
Babylon 360 is Babylon’s digital-first value-based care service. Babylon 360 combines cutting-edge AI-powered technology with human medical expertise to help members stay out of the hospital and remain in control of their health. Using a combination of Babylon’s primary care professionals’ expertise and data, Babylon 360 gives members actionable insights and information about their wellbeing, and – by helping members to understand their specific needs – helps them set personalized health goals. If there’s a problem, Babylon 360 gives 24/7 access to a dedicated Personal Care Team, so that consumers can receive the most appropriate care, medication and treatment. A recent survey among Babylon 360 members identified that more than 40% of consultations had resulted in consumers avoiding the emergency room or urgent care visits, generating significant cost savings.
Babylon Cloud Services provides a suite of digital self-care tools that enables consumers and primary care professionals to gain insights and information either through Babylon directly or through Babylon’s roster of top-tier partners. The tools include Babylon’s AI symptom checker, which provides a 24/7 source of health information to consumers when they need it, and Babylon’s Healthcheck, which offers a comprehensive, digital-first health assessment that identifies at-risk conditions and actionable next steps members can take which aim to improve overall health and decrease future risk of disease.
Alkuri Global Acquisition Corp. is a blank check company formed for the purpose of effecting a merger, stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses or entities. Alkuri Global intends to favor next-generation technology businesses led by visionary founders and teams leveraging data and artificial intelligence in the areas of Consumer Internet and Marketplaces, Healthtech, Fintech and Mobility.
This was reported by Babylon Health on June 3, 2021.
Contact information: Ali Parsa, Ph.D., Chief Executive Officer, Babylon Health, 60 Sloane Avenue, London United Kingdom; SW3 3DD; +44 (0)20 7100 0762; Email: firstname.lastname@example.org; Website: https://www.babylonhealth.com/
Contact information: Alkuri Global Acquisition Corp., 4235 Hillsboro Pike, Suite 300 Nashville, TN 37215; 615-632-0303; Website: https://www.alkuri.com/