Wipro acquires US firm HealthPlan Services for $460 mn
12 February 2016
Wipro, India's third-largest software firm, has acquired Florida, US-based HealthPlan Services from private equity firm Water Street Healthcare Partners, in a deal worth $460 million, its second-largest acquisition, as it seeks to push its healthcare vertical into the billion-dollar club.
With around 2,000 employees, HealthPlan Services provides technology and business-process-as-a-service (BPaaS) on a subscription basis to the health insurance sector.
Wipro on Thursday announced the signing of a definitive agreement to acquire HealthPlan Services from Water Street Healthcare Partners, a strategic investor focused exclusively on the health care industry.
As part of the agreement, Wipro will acquire 100 per cent of HealthPlan Services' shares for a purchase consideration of $460 million.
Since partnering with Water Street in 2008, HealthPlan has grown to become the leading independent technology and business process as a service (BPaaS) provider in the US health insurance market. The technology is proprietary and HealthPlan connects to clients across 40 public exchanges, company officials said.
Healthcare exchanges were introduced by US President Barack Obama with the aim of helping individuals buy health insurance.
Wipro acquired three companies last year ranging from design companies to small tech providers in the financial sector as it seeks to get back on the growth path. With this acquisition, Wipro is looking to give its healthcare business a major fillip.
''The partnership with HealthPlan Services positions Wipro to participate in the shift of the US health insurance industry towards a consumer-centric business model,'' said Jeffrey Heenan Jalil, senior vice president and head, Healthcare Life Sciences and Services, Wipro. This vertical, which was one of the bright spots in the third quarter of this fiscal, accounted for 12 per cent of revenue, 5.2 per cent sequential growth and year-on-year growth of 4.9 per cent.
By partnering with HealthPlan Services, Wipro hopes to gain the competitive, first-mover advantage in the high growth public and private exchange space for individual, group and ancillary markets. This partnership also strengthens Wipro's payer portfolio, with access to HealthPlan Services' payer clientele.
''This transaction is closely aligned with Wipro's key levers for growth, which are to dominate the services market through industry utilities that multiple customers can use. This acquisition adds another platform-led business process as a service offerings, delivered on cloud to Wipro's services portfolio.
Wipro's clients currently include over 100 US payers, leading healthcare providers, and public health agencies.
The transaction is subject to customary closing conditions and regulatory approvals and is likely to be completed in next 60 to 90 days.