Troubled healthtech Babylon is hoping to wrap up the sale of its UK business by Friday after a proposed merger fell through, forcing the company to shut down its US business.
Sifted understands that the deadline to submit bids passed at 12pm on Monday and that the number of interested parties is in the single figures.
According to a letter sent to the prospective buyers, which Sifted has seen, the sale of the company will be carried out through an “accelerated bidding process” with a binding sale to be agreed by Friday August 25 at the latest.
Babylon has said the sale of the UK business is not expected to exceed its $300m+ debt to credit funder AlbaCore Capital. That means other shareholders — like VCs Kinnevik, VNV Global and Saudi Arabia’s PIF — will not receive payment.
Babylon’s UK customers, like the NHS and Bupa, will have a say in the deal, according to the letter.
Scrambling to sell
The breakneck speed at which Babylon is looking to secure a buyer is a sign of the precarious financial position the company now finds itself in, after a proposed merger with Swiss unicorn MindMaze fell through at the start of August.
The collapse of the deal saw Babylon abruptly shut down its US operations — which made up the vast majority of the company’s $1.1bn revenue in 2022 — and file for bankruptcy in its biggest market.
While its UK business remains operational for now, Babylon said in a statement on August 7 that it “cannot provide assurance that it will be able to secure sufficient liquidity to fund the operations of the group’s businesses”.
Why so speedy
“If the company is teetering on the edge of insolvency, the longer it continues [without selling] the more chance it’s got at losing revenue streams,” says Adam Kudryl, partner and head of corporate at law firm Harper James.
Key partners like Bupa and the NHS would likely have the right to terminate contracts if the business can’t fulfil them — and if it were to lose them, the already clipped valuation of Babylon would be driven even lower, he adds. Babylon’s current contract with Bupa runs until 2025.
Babylon’s UK business also includes several smaller B2B contracts and a direct-to-consumer offering. Sifted understands the company is also looking to sell its proprietary tech stack.
Management consultant Alvarez and Marsal are running the sales process.
Private health insurance giants Bupa and Vitality, tech companies HealthHero and Cera and Ali Parsa himself have all been mooted as potential buyers of the beleaguered healthtech by industry watchers. They’ve all been approached for comment about their intentions to buy Babylon. Swedish digital health scaleup Kry has confirmed to Sifted that it hasn’t submitted an offer for Babylon.
