Blackstone Emerges Front-Runner in $1.3 Billion AGS Health Buyout
The deal, which is expected to value AGS Health between $1.1 billion and $1.3 billion, marks one of the largest transactions in India’s healthcare IT and revenue cycle management (RCM) space.
Global private equity giant Blackstone has taken the lead in the high-profile sale of EQT-owned healthcare IT services firm AGS Health.
The deal, which is expected to value AGS Health between $1.1 billion and $1.3 billion, marks one of the largest transactions in India’s healthcare IT and revenue cycle management (RCM) space.
As per reports, Blackstone pulled ahead of competitors after submitting binding offers last week.
A consortium of TPG and General Atlantic, along with Frazier Partners and Vitruvian Partners, were also among the key contenders for the acquisition.
“Post the submission of binding bids last week, Blackstone has edged ahead of other bidders and is now seen as the lead candidate to bag the deal. A final call is yet to be taken,” as reported by Moneycontrol.
The Bidding Race
The transaction comes amid a wave of M&A activity in the healthcare outsourcing sector.
Recent deals include EQT’s own acquisition of GeBBS Healthcare for over $850 million, New Mountain Capital’s $2 billion majority stake purchase in Access Healthcare, and Ontario Teachers' Pension Plan’s $1.8 billion buyout of Omega Healthcare.
AGS Health, headquartered in Chennai, is one of the last large-scale independent RCM providers remaining on the market.
Acquired by EQT in 2019 for $320 million, the company employs over 13,000 people and serves more than 150 healthcare clients, including nearly half of the 20 most prominent hospitals and 40% of the top 10 health systems in the United States.
The company is expected to report an EBITDA of around $60 million and revenue of $150 million for the current fiscal year.
We earlier reported that Blackstone, along with other private equity firms, had advanced to the final due diligence stage. EQT appointed JP Morgan and Bank of America as advisors for the sale process, first reported in February.
As one person involved in the process said, “The valuation is expected to be in the region of $1.1 billion to $1.3 billion.”
Rising Market Growth
Private equity interest in healthcare BPOs and IT services has been surging, fueled by the growing demand for cost-efficient healthcare delivery models globally.
According to BCC Research, the global healthcare BPO market is forecast to grow from $151.9 billion in 2022 to $259.5 billion by 2028, at a CAGR of 9.7%.
A decision on the AGS Health transaction is expected in the coming weeks.
Stay tuned for more such updates on Digital Health News.
Stay tuned for more such updates on Digital Health News
