The sale of Los Angeles-based healthcare BPO firm GeBBS Healthcare Solutions has entered into the last lap with Hillhouse Investment emerging as the highest bidder to acquire the company. Hillhouse, according to people in the know, has offered about $870 million for a 100% stake against an offer of $855-860 million by the next contender, EQT Partners . Earlier this year, Hillhouse had partnered with a senior management team in India to build an IT-enabled Business Process Management (BPM) platform - Novarete.
The team behind Novarete is headed by Gautam Barai (formerly COO and President at WNS) and Gautam Narayan (Ex Partner, Apax Partners). If successful, post acquisition Gebbs will be run by these two industry veterans. However, the final decision will come out in next 2 weeks as ChrysCapital, which owns Gebbs, is doing another round of negotiations with Hillhouse and EQT, added sources.
Other contenders, Carlyle or CVC Capital Partners has not submitted any binding bid. ChrysCapital - the homegrown fund owns about 80% stake in Gebbs. A clutch of global funds including Carlyle, Hillhouse Capital and CVC Capital were shortlisted to acquire GeBBS Healthcare Solutions, ET reported in July.
Founded by Vijay Singh in 2005, GeBBS Healthcare Solutions is a leading player in offshore healthcare administrative services - a provider of revenue cycle management (RCM) solutions. Gebbs employs 14,000 staffs under 16 delivery centres across the globe. Globally, GeBBS competes with Wipro, IBM, Cognizant, Hewlett Packard, Quintiles IMS Holdings, AGS Health, Accenture, DSM Pharma and Xerox Corp.
ET first reported in April about ChrysCap's plan to sell GeBBS. Jefferies and Avendus Capital are running the mandate for ChrysCapital. ChrysCap acquired an 80% stake in GeBBS in 2018 for $140 million, at a valuation of $175 million.
Once this deal materialises, Chryscap will reap a 5-6X return, said sources. Besides ChrysCap, the founders are also selling their minority stake in this round, said sources. GeBBS has posted a revenue of about $200 million and an EBITDA of $50 million in FY24, said sources.
In FY25, it is expected to clock $70 mn in EBITDA.. Mails sent to GeBBS, ChrysCapital, EQT, Hillhouse did not elicit any responses.
EQT Private Capital Asia (formerly known as Baring Private Equity Asia) also owns AGS Health, a medical revenue cycle management (RCM) company and a competitor of Gebbs. Baring PE Asia had acquired AGS in 2019 for $320 million. AGS Health team of 12,000 staffs serves more than 150 customers spanning a variety of care settings and specialties, including nearly 50% of the 20 most prominent US hospitals and 40% of the US’ 10 largest health systems.
Hillhouse, which manages more than $100 billion in public and private market investments across the globe, has deployed about $1 billion in India since 2010 with investments in Swiggy, CarDekho, Cred, and Sharechat. EQT had also acquired healthcare Services business of Hinduja Global Solutions - the business process management entity of Hinduja Group, for an enterprise value of Rs 9000 crore ($1.2 billion.
) in 2021 - in one of the largest PE deals in the outsourcing space. Recently, EQT filed DRHP to list the BPO business - renamed as Sagility. According to the latest BCC Research study, the demand for Global Healthcare Business Process Outsourcing (BPO) Market is estimated to increase from $151.
9 billion in 2022 to reach $259.5 billion by 2028, at a compound annual growth rate (CAGR) of 9.7% from 2022 through 2028.
The relentless rise in healthcare costs globally has heightened the urgency to find effective cost-reduction strategies. The healthcare BPO market serves as a pivotal solution, offering a pathway to achieve operational efficiency and financial savings. Organizations are increasingly turning to BPO to streamline processes, cut unnecessary expenses, and navigate the complex landscape of healthcare expenditures, it said.
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