Babylon Holdings Limited (“Babylon”), one of the world’s fastest-growing digital healthcare companies, today announced that it has secured a sustainability-linked investment of up to $200 million from Albacore Capital Group (“AlbaCore”), a strategic capital investment firm.
Together with already committed PIPE capital of $230 million from institutional and strategic investors, Babylon will now have access to as much as $775 million of capital (before fees) following the merger with Alkuri Global Acquisition Corp. (NASDAQ: KURI, KURIU and KURIW) (“Alkuri”), a publicly traded special purpose acquisition company, assuming no redemptions, with a minimum of $430 million of capital guaranteed to continue fueling Babylon’s sustained growth.
Charlie Steel, Babylon’s Chief Financial Officer, said: “I am delighted that AlbaCore, with its steadfast focus on Environmental, Social and Governance (ESG) engagement, is investing in Babylon. ESG is central to Babylon’s mission which is to make quality healthcare accessible and affordable for every person on Earth. Whether we are delivering world class health care to the under-served populations of rural America and Rwanda, or committing to Tech Zero to reduce carbon emissions, as a team we are constantly challenging ourselves to do more and better. AlbaCore’s commitment to ESG makes it a perfect match for Babylon and I’m delighted to welcome them as an investor.
“With this investment, we have more guaranteed capital to fund the continued expansion of our business operations and membership base.”
Bill Ammons, Founding Partner and Portfolio Manager at AlbaCore Capital Group, commented: “We are excited to be announcing this new partnership with Babylon to support its growth plans towards making healthcare accessible and affordable to everyone. This investment is an example of how strategic capital providers can have a real and positive social impact. Since day one we have integrated a responsible investment risk lens into our investing at a firm-wide level and see it to be essential for successful investing.”
David Allen, Managing Partner and Chief Investment Officer at AlbaCore Capital Group, added: “As creators of innovative solutions, Babylon and AlbaCore are great partners. We recognize their proven ability to grow rapidly and deliver leading technology-based healthcare, forming the basis for our investment.”
The instrument will be in the form of 5-year unsecured notes with 0.5% penny warrants capped at $15/share. The interest rate payable by Babylon on the notes initiates at 8% and increases to 12% over the 5-year period (up to 50% PIK at Babylon’s election), with a potential, small rate adjustment tied to the delivery of affordable healthcare to underserved populations. The proceeds will provide Babylon with additional capital ranging from $100 million to $200 million of debt, with the investment level to be determined at Babylon’s option upon closing of the merger with Alkuri. The investment has been approved by AlbaCore, subject only to completion of the merger transaction, which we expect shortly after the shareholder meeting on October 20, 2021. The investment remains subject to final approvals by Alkuri and Babylon stakeholders.
Ardea Partners LP and Citi acted as placement agents on the transaction, and Allen & Overy LLP served as legal counsel to Babylon. Shearman & Sterling LLP served as legal counsel to AlbaCore.