Hinduja Global Solutions Ltd (HGS), the business process management arm of the multibillion-dollar Hinduja Group conglomerate, said it has entered into a definitive agreement to divest its healthcare services business to funds affiliated with Baring Private Equity Asia for an enterprise value of $1.2 billion (Rs 8902 crore).
Partha DeSarkar, global CEO, HGS, said in a stock market disclosure that it will use the funds from the divestment to strategically invest for the future growth.
It will continue to focus on aggressively expanding its consumer engagement solutions (CES) and digital businesses in line with its aim to transform itself into a digitally-enabled customer experience company, he added.
Post the completion of the transaction, HGS will transfer all client contracts, employees, and assets, including infrastructure related to the healthcare services business to Baring Private Equity Asia.
HGS' healthcare services business, which caters to payer, providers, laboratories, durable medical equipment firms and pharmaceutical companies, clocked revenue of $400 million in fiscal 2020-21. The business has more than 20,000 employees across four geographies -- India, the Philippines, the US and Jamaica.
Baring Private Equity Asia's deal with HGS will be the third investment in the healthcare technology services segment. It has previously invested in CitiusTech and AGS Healthcare.
The transaction is subject to shareholder and other regulatory approvals and is expected to be completed within 90 days.
Barclays Bank Plc acted as the sole financial advisor to HGS on the transaction.
HGS has over 42,769 employees across 55 delivery centers in seven countries. It clocked revenue of $753.9 million in the last fiscal ended March 31, 2021.
In November last year, HGS said it will up its stake in a United States-based step-down subsidiary to nearly 92%.
This is Baring Private Equity Asia's seventh deal in the broader IT sector. Last year, the private equity firm along with Canada Pension Plan Investment Board (CPPIB) bought Nasdaq-listed software services and digital engineering firm Virtusa Corporation. It is also an investor in Coforge Ltd, previously known as NIIT Technologies Ltd, from which it partially exited last year.