Babylon Healthcare Services Limited agreed to acquire Alkuri Global Acquisition Corp. from Alkuri Sponsors LLC and others in a reverse merger transaction for approximately $580 million.
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") at $10.00 per share funded over 85% from new, external institutional investors including AMF Pensionsförsäkring, Sectoral Asset Management and Swedbank Robur with strategic investor Palantir (NYSE:PLTR). There is additional participation from Ali Parsa, Alkuri Sponsor LLC and existing Babylon investors Kinnevik (STO:KINV-B) and VNV (STO:VNV). Kinnevik intends to invest $5 million in the PIPE, bringing its ownership of Babylon at completion of the transaction to 13%. The 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. In a related transaction, Babylon previously acquired an option to purchase Higi and intends to acquire the remaining Higi equity stake it does not already own. Upon closing of the transaction, the combined company will operate as Babylon and plans to trade on Nasdaq under the new symbol "BBLN". Following closing, Babylon will retain its experienced management team. Ali 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.
The transaction is subject to certain customary conditions, including, among other things, approval by Alkuri's stockholders, regulatory approvals, receipt by Alkuri and Babylon of reasonably satisfactory evidence that Babylon will qualify as a foreign private issuer, the expiration or termination of the waiting period applicable under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, the Form F-4 and the Form 8-A shall have been declared effective by the SEC, the Pubco Shares (including the Pubco Class A Shares to be issued in connection with the transactions) shall have been approved for listing on Nasdaq following closing, Alkuri has at least $5,000,001 of net tangible assets after giving effect to any redemption obligations, and delivered cash at closing in an amount that equals or exceeds $230 million. The transaction has been unanimously approved by the Boards of Directors of both Babylon and Alkuri Global. The board of directors of Alkuri Global Acquisition unanimously recommends its shareholders to vote "FOR" the transaction. Certain shareholders of Babylon, constituting the requisite number of Babylon Shareholders for the purposes of applicable laws approved the transaction. Alkuri also entered into voting and support agreements with certain shareholders of Babylon, pursuant to which such shareholders agreed, among other things, not to revoke their approval of the transaction. As of September 30, 2021, special meeting of stockholders of Alkuri Global Acquisition Corp. to be held on October 20, 2021. The transaction is expected to close in the third quarter of 2021. As of September 15, 2021, the transaction is expected to close in mid-October 2021. As of October 5, 2021, the transaction is expected to close on or about October 21, 2021. As of October 20, 2021, shareholders of Alkuri Global Acquisition Corp approved the transaction.
Ardea Partners LP acted as financial advisor; Citi acted as financial and capital markets advisor; and Megan J. Baier and Mark P. Holloway of Wilson Sonsini Goodrich & Rosati, P.C., Will Samengo-Turner of Allen & Overy LLP, and Walkers (Jersey) LLP acted as legal advisors to Babylon. Jefferies acted as exclusive financial advisor; and Kyle Gann, David Sakowitz, Ben Liss, Ben Smolij, Angela Russo, Becky Troutman, Nicholas Usher and Katie Blaszak of Winston & Strawn LLP acted as legal advisor to Alkuri Global. Jefferies, Citi, and Pareto Securities AB acted as placement agents on the PIPE. Sebastian L. Fain of Freshfields Bruckhaus Deringer LLP acted as legal advisor to Ali Parsa, Founder, Chief Executive Officer, and major shareholder of Babylon. Continental Stock Transfer & Trust Company acted as transfer agent to Alkuri. Jefferies will receive $10 million as the financial advisory fee. Computershare, Inc. acted as transfer agent to Babylon Healthcare Services Limited. Ardea Partners LP and Citi, the financial advisors of Babylon, will receive $7.5 million and $4 million respectively, and any additional amount at Babylon Holdings' discretion in fees for their respective involvement in the transaction. Morrow Sodali LLC acted as the information to Alkuri and will receive a fee of $37,500 plus disbursements for such services.