Hinduja Global sells healthcare services business to Barings for $1.2 billion

Business Process Outsourcing firm Hinduja Global Solutions (HGS) has sold its healthcare services business to Barings Private Equity Asia for an enterprise value of $1.2 billion.

“The proposed transaction is subject to completion of conditions precedent including regulatory approvals and approval of the shareholders of the company,” HGS said in a stock exchange filing.

The healthcare service business accounted for 53 per cent of HGS revenues and 23 per cent of its net worth. The company said that the sale was part of a plan to unlock value for stakeholders.

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.

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 nine verticals. Services to healthcare clients delivered by the HGS Digital and HRO/Payroll businesses will continue to be part of HGS’ portfolio.

Unlocking value for shareholders
“Our Healthcare Services business has steadily grown over the years. We reached a stage where we could recommend to promoter 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 organisation. We see a long-term value and benefit to HGS in doing so. HGS will continue to focus on aggressively expanding its CES and Digital businesses in line with our goal to transform itself into a ‘digitally-enabled customer experience (CX) company”, said Partha DeSarkar, Global CEO, HGS.

Jimmy Mahtani, Managing Director, BPEA, said “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.” The Hindu BusinessLine