Apollo Hospitals'' healthcare BPO Apollo Health Street buys Zavata Inc for Rs697 crore

Venkatachari Jagannathan
30 August 2007

Chennai: Continuing its strategy of acquisitive growth, Apollo Health Street Limited has bought Zavata Inc, and Atlanta-based business process outsourcing (BPO) for Rs697 crore.

With this acquisition, Apollo Health Street becomes one of the world''s largest healthcare outsourcing companies, said, Dr. Prathap C Reddy, chairman. The company is an associate of Apollo Hospitals Enterprise Limited.

For Apollo Health Street, this is the fourth acquisition and second one in the US and some more may be on the anvil, said Reddy.

After taking into account the fund needs for working capital and other transaction processing functions, the total outlay for Apollo Health Street comes to $185 million. The acquisition will be funded through a combination of debt and equity.

Apollo Health Street has tied up with Bank of India and Barclays Capital for $135 million and the balance will be funded through promoters'' equity - Apollo Hospitals ($25 million), Temasek Holdings and One Equity Partners, the investment arm of J P Morgan, bring in the balance in the equity holding ratio.

The Indian BPO has employee strength of 1200 and Zavata has around 1000 with 459 working in its Hyderabad centre. The combined entity will have a customer base of 160.