Babylon Health has just announced that its operations in the US will be closed after its rescue merger has fallen apart. The company said that its operations in Austin, USA, will stop and laid off 94 employees as well. According to a report, Babylon Health “offers virtual primary care, including telehealth appointments, symptom checkers and prescription services”. It is also worth noting that “At the end of June, the New York Stock Exchange suspended trading of Babylon shares and delisted the company. The stock exchange cited two reasons: Babylon’s average total market capitalization over a consecutive 30 trading-day period was less than $50 million, and the average closing price of its ordinary shares were less than $1 over the same period. The company said it did not intend to cure these deficiencies in light of the expected closing of its rescue merger”, MedCityNews reports.
In its announcement, Babylon said, “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.” The company also mentioned that “it will look for a buyer to salvage its U.K. business. However, the potential sale of the company’s U.K. business will be subject to AlbaCore’s rights under its debt agreements with Babylon, and the sale proceeds are not expected to exceed the company’s debt to AlbaCore”.
Partner at West Monroe consulting firm, Ray said, “I think we all expect that if a company goes public, it’s stable, mature, and investable. But I don’t think that is necessarily the case. It’s just a different way of capitalizing on early investors. They felt that was the way to get the company moving forward, and they obviously found enough capital for it to roll all the way here. But looking at their prospects, the actual maturity of the business, and its cash burn rate, I think they finally just called it quits,”
