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Apollo Health Street, the BPO arm of hospital major Apollo Hospitals Enterprise Ltd AHEL, on Thursday announced that it had signed an agreement with Atlantabased, Zavata to acquire the latters medical BPO business for US Dollar170 million.
The deal entails a cash plus debt component. The cash in the form of equity infusion by Apollo Hospitals group by US Dollar25 million, and the rest raised from private equity investors. One Equity Partners the investment arm of JP Morgan and Temasek have invested US Dollar25 million, which will be used to part fund the buyout, Dr Prathap C Reddy, chairman of Apollo said. The debt valued at US Dollar120 million has been raised from Bank of India and Barclays Capital.
Zavata is into building, coding and adjudicating services for hospitals and insurance companies in the US, besides full business office and emergency medical transport billing. The revenu es of the company is around US Dollar120 million for the year ended December 2006. This is similar to what we do in Apollo Health Street, but we now have the advantage to bring in enterprise solutions which Zavata has to other clients of us, Dr Reddy added.
Apollo Health is a US Dollar40 million company specialising in medical process outsourcing. Together, we now have revenue runrate of US Dollar160 million, which we hope will grow by 50 percent atleast this year and years to come, he said.
The US company has 1,600 employees and the Indian company has 650 people dedicated for the BPO business. Together, the combined entity boasts of a clientele of more than 100 customers.
For the moment we do not envisage the need to increase the manpower, our focus is to move more work to India and integrate the operations and make it a strong and potent one here. The opportunities are huge, it is now for us to tap the market effectively, Dr Reddy said. This is the fourth acquisition that Apollo Health Street has made and companys second in the US.
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