Hinduja Group’s business process management entity, Hinduja Global Solutions Limited (HGS), said Wednesday it has entered into definitive agreements to divest its healthcare services business to funds affiliated with Baring Private Equity Asia (BPEA), one of the largest private alternative investment firms in Asia.
The transaction is based on an enterprise value of $1.2 billion, subject to closing adjustments, and is expected to conclude within 90 days, subject to shareholder and other regulatory approvals.
HGS said it will focus on strengthening its Consumer Engagement Solutions (CES), HGS Digital and HRO/ Payroll businesses that support several top global brands across its 9 verticals.
Services to healthcare clients delivered by the HGS Digital and HRO/ Payroll businesses will continue to be part of HGS’ portfolio.
“Our healthcare Services business has steadily grown over the years. We reached a stage where we could recommend to the promoters to divest stake in this business to unlock value for all HGS stakeholders. We will use the generated funds to strategically invest for the future growth of the organization. We see a long-term value and benefit to HGS in doing so”, said Partha DeSarkar, Global CEO, HGS, in a statement.
HGS’ healthcare services business supports payer, providers, laboratories, durable medical equipment firms and pharmaceutical companies with solutions that augment clients’ healthcare teams to deliver better patient, member, business and financial outcomes.
The services cover the entire lifecycle of a payer organisation, including member acquisition, enrollment & billing, benefit set-up, claims adjudication, provider credentialing & data management, payment integrity & financial recovery, grievance and appeals, provider & member engagement, prior authorizations, case management and population health management, and the various functions in the revenue cycle of a provider organization.
The Healthcare Services vertical has over 20,000 employees across four geographies – India, the Philippines, the US and Jamaica – and recorded revenues of approximately $400 million in FY2021.
Post completion of the transaction, HGS will transfer all client contracts, employees, and assets, including infrastructure related to the Healthcare Services business.
“We have been investing in the Technology Services sector for more than two decades and have long-admired HGS as a leading specialist Healthcare Services provider. We are excited to now have the opportunity to partner with CEO Ramesh Gopalan and his team to help take HGS’ Healthcare Services business to the next level as a new independent company. This will be our seventh investment in the sector and third in Healthcare Technology Services following previous investments in CitiusTech and AGS Healthcare, and we continue to be excited about the digital transformation opportunity in the space,” said Jimmy Mahtani, MD, BPEA.
Barclays Bank Plc.acted as the sole financial advisor to HGS on the transaction.
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