Firstsource acquires MedAssist for $330 mn

Mumbai-based Firstsource Solutions, a pure-play business process outsourcing provider, has acquired US-based MedAssist Holding for $330 million (Rs 1,353 crore).The deal is subject to regulatory approval under the US health services research (HSR) statute.It is the second-largest acquisition after Wipro bought out Infocrossing for about $600 million.

Firstsource has raised a debt of $275 million at 2.5-3 per cent above the LIBOR (London Inter-Banking Official Rate) for a five-year term. The balance $55 million will be paid through internal accruals. The company has a cash reserve of $80 million (around Rs 328 crore).

MedAssist is a debt-free company with a top line of $99 million. Its EBITDA margins are in the range of 22-24 per cent.

MedAssist, headquartered in Louisville, Kentucky has 1,400 employees and is a pan-American provider of revenue cycle management services to the healthcare industry. It has over 800 clients, including hospitals, large physician groups and alternate site providers.

Read more in The Business Standard article.

Firstsource frontrunner for $300mn MedAssit buy

A leading Indian pure-play business process outsourcing (BPO) firm, Firstsource Solutions, has emerged as the frontrunner in the quest to buy US-based healthcare player MedAssist. The deal size, say sources, is close to $300 million (around Rs 1,200 crore). If it takes place, the acquisition will be one of the largest overseas aquisitions after Wipro's buyout of Infocrossing for around $600 million, and the largest in the BPO space.

Sources close to the deal say there's one more serious contender in the race for MedAssist which has revenues of $90-100 million and provides provides services in patient services, eligibility services, patient financing and healthcare collections. It has around 1,400 employees and 950 healthcare providers as clients.

Firstsource is also rumoured to be in the race to acquire Citi's BPO unit after the first round of bidding. The sale of the BPO business, being run by Citigroup Global Services (formerly eServe), is expected to fetch Citi around Rs 3,200 crore. Other bidders include WNS and Genpact.

During its initial public offering (IPO) in end-January, the Firstsource management had indicated that the company intends to use the net proceeds of the issue to make acquisitions, set up new facilities, repay loan and for general corporate purposes. Out of the proceeds of the IPO, the company plans to spend approximately Rs 180 crore on acquisitions.

Wipro strings largest IT deal for $600 mn

Wipro Technologies has signed a definitive agreement to acquire the Nasdaq-listed Infocrossing for $18.70 per share, pegging the enterprise valuation of the IT infrastructure management services firm at $600 million, including $60-million debt, in an all-cash deal.This marks Wipro’s 12th acquisition in the IT space and the ninth in the past 24 months alone, in what is being famously tagged as ‘string of pearls’ strategy.

The entire process of acquiring Infocrossing is likely to close by December 2007, and the acquired entity will be merged with Wipro’s subsidiary in US — Wipro Inc. This buyout brings in a revenue of $232.4 million with 900 people spread across five locations in the US.Wipro, for the first time, is in process of acquiring a publicly-held company.

Read more in The Economic Times article.