One Equity, Temasek Back Apollo’s $170M Buyout Of US Medical BPO Zavata
In a private equity-backed buyout, Apollo Health Street, the BPO arm of hospital chain Apollo Hospitals Enterprise Ltd (AHEL), has bought out a US based medical BPO business Zavata for $170 million. The deal involves an equity component of $50 million and a debt of $120 million. The equity contribution from Apollo is $25 million, while One Equity Partners (the investment arm of JPMorgan Chase & Co) and Temasek Holdings will invest a combined $25 million. The debt of $120 million has been raised from Bank of India and Barclays Capital.
Apollo Hospitals owns 46 percent in Apollo Health Street, which is a $40 million company specialising in medical process outsourcing. It has a revenue run-rate of $160 million, according to a report in The Times of India.
Zavata, which had revenues of $120 million in the year ended December 2006, is into building, coding and adjudicating services for hospitals and insurance companies in the US, besides full business office and emergency medical transport billing. Zavata has 1,600 employees, while Apollo Healthstreet has 650 people. The combined entity will have 100 customers. This is the fourth acquisition of Apollo Health Street, and its second in the US.
