New Delhi: Some of the biggest buyout groups such as Advent International, Blackstone and Carlyle are competing to acquire a majority stake in Texas-headquartered healthcare BPO Access Healthcare, said people aware of the development. Hillhouse Investment, which narrowly missed out to EQT on a similar US-centric firm GeBBS in September, is also making a strong bid.
All these firms are due to submit non-binding offers by the middle of December for a 60-70% stake in the company, valuing it at $1.4-1.5 billion. The quantum of the stake sale is expected to be decided over subsequent rounds of negotiations, said the people cited.
Set up in 2012 by Anurag Jain, an Indian-origin serial entrepreneur and venture capitalist, privately held Access Healthcare has 20 global delivery centres in nine cities in India, the Philippines, and the US.
Access Healthcare provides services to hospitals, healthcare systems, medical groups, medical billing companies, health plans, and boutique revenue cycle management (RCM) software and services firms. A team of over 27,000 helps clients redefine revenue cycles and improve administrative, financial, and clinical outcomes, according to the company website. It supports 500,000 physicians and processes over 400 million transactions per year, managing $120 billion in claims annually, the website said.
Blackstone, Hillhouse and Carlyle declined to comment. Access Healthcare and Advent didn’t respond to queries.
Besides Jain, other investors in Access Healthcare include former executives at Dell Services (Perot Systems) and Ross Perot Jr. Athenahealth, a cloud-based software company that provides solutions for health systems and medical groups, also owns a minority stake in the company.
As managing partner of Perot Jain LP, Jain is also the co-owner of the Texas Super Kings Team in the US Major League Cricket tournament. He also cofounded Brigade Corp., an international customer support company, and founded Vision Healthsource, an Indian IT and business process outsourcing company.
Healthcare BPOs, especially for those engaged in revenue cycle management, are among the hottest investment areas for private equity investors who have been on an acquisition spree.
Last month, TA Associates bought a majority stake in Bengaluru and US-based RCM services provider Vee Healthtek for $250 million (Rs 2,100 crore) from its promoters, the Chennai-based Valliappa family. In September, EQT had outbid Hillhouse to acquire 100% of GeBBS Healthcare Solutions, a global provider of RCM services and risk-adjustment solutions, from ChrysCapital for about $860 million.
EQT, formerly Baring PE Asia, also owns AGS Health, another medical RCM company and a competitor of Gebbs. AGS, acquired in 2019 for $320 million, is on the block too at a valuation of $1-1.2 billion.
Early this year, Hillhouse had teamed up with former COO and president of WNS Gautam Barai and Gautam Narayan, former partner, Apax Partners, to build IT-enabled BPM platform Novarete. With a $300-400 million commitment from Hillhouse, Novarete plans to expand its IT-enabled BPM platform in the healthcare and banking, financial services and insurance (BFSI) sectors through organic growth and acquisitions, ET had reported in February.
Hillhouse was founded in 2005 by Zhang Lei with an investment from the endowment at Yale University, where he studied. The investment firm, which manages more than $100 billion in public and private market investments across the globe, made its reputation making prescient bets on some of the hottest Chinese tech companies, including Tencent and TikTok owner ByteDance. Its China unit later began raising separate renminbi funds as geopolitical issues put the spotlight on foreign capital backing Chinese corporations. It has deployed about $1 billion in India since 2010 with major investments in Swiggy, CarDekho, Cred and Sharechat.
According to a BCC Research study, the global healthcare BPO market is estimated to expand from $152 billion in 2022 to $259 billion by 2028, clocking a compound annual growth rate (CAGR) of 9.7%.
The continuous rise in healthcare costs has increased the urgency of finding effective cost-reduction strategies. Organisations are increasingly turning to BPOs to streamline processes, cut unnecessary expenses and navigate the complex landscape of healthcare expenditure, the report said.
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