Babylon closes US business as rescue merger deal fails

Tim Mossholder

Babylon Health's efforts to raise financing to steady its business have been scuppered by the collapse of a proposed merger with digital therapeutics firm MindMaze, which would have taken it back into private hands.

With the rescue deal agreed in June now in tatters, the telehealth company is now facing the threat of going into administration. According to a Forbes report it has already shut down its US business, with the loss of 94 jobs, and is now looking for a buyer for its UK operations.

UK-headquartered Babylon went public in 2021 via a merger with a special purpose acquisition company (SPAC), starting out with a share price of almost $243 and a market cap of more than $3.5 billion. Its shares were delisted from the NYSE in June and are currently valued at $0.02 on the OTC market, with a market cap of $441,000.

In May, it said it would cede ownership to its main lender Albacore Capital, shortly after reporting first-quarter sales of $311 million and a net loss of $63 million - more than double the year-earlier figure.

There's been no word from the company since the announcement that the MindMaze merger had fallen through, which noted that Babylon "has no binding commitment for additional financing to continue its business operations."

It added that the company was "exploring new strategic alternatives in order to find the best possible outcome for its UK business," including a possible sale to a third party, and was "in discussions with potential strategic partners to secure additional funding."

If no financing or acquisition deal is agreed, it will have to file for bankruptcy protection or look at other routes to liquidation or dissolution of its UK business.

Babylon said it is also pressing ahead with the sale of its Meritage Medical Network independent physicians association business, which had revenues of $400 million last year.

The 10-year-old company's core business is primary care delivery, which draws on remote consultations with healthcare providers and an artificial intelligence-powered app for diagnosis, coupled with in-person healthcare delivery.

In the UK, it operates GP at Hand, an online-first practice with over 100,000 registered NHS patients around London. The retreat comes after a series of acquisitions to extend its portfolio, including retail health kiosk business Higi and DayToDay Health, which provides digital clinical services for surgery patients.