Sutherland Global Services to acquire Apollo Health Street
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US-based BPO firm Sutherland Global Services will acquire the healthcare outsourcing arm of Apollo Hospitals – Apollo Health Street (AHS) – for about Rs 1,000 crore.
Sutherland today said it has signed a definitive agreement to acquire acquire 100 per cent stake in AHS, which will strengthen its presence in the USD 38 billion US Healthcare BPO market.
"The acquisition will help Sutherland consolidate its services portfolio across payer, provider and health IT services," Sutherland Global Services Founder Chairman and CEO Dilip Vellodi said.
BPO giant Genpact was also in the fray for acquiring AHS.
Apollo Hospitals Enterprise, which holds 38 per cent stake in AHS, will get around Rs 225 crore for its stake as part of the deal.
When contacted, Apollo Hospitals Chief Financial Officer Krishnan Akhileswaran told PTI that the enterprise value of deal, which also factored the debt on the books of AHS, "is nearly Rs 1,000 crore and Apollo would realise around Rs 225 crore from the divestment".
The all-cash transaction is expected to close by February 2013, subject to customary regulatory and other conditions.
Commenting on the development, Apollo Hospitals Chairman Prathap C Reddy said that in order to drive Apollo Health Street's growth to the next stage of its evolution, it was essential to find the right partner.
"In Sutherland Global Services, we have found a strategic partner with a proven track-record of excellence in services, and leadership. The combined capabilities of Sutherland Global Services and Apollo Health Street will create a compelling value proposition for our clients," Reddy added.
Shares of Apollo Hospitals Enterprise were trading at Rs 805 a share, down 0.02 per cent in the afternoon trade on BSE.
"The acquisition will bring on board 3,200 professionals with deep industry knowledge," Vellodi said.