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India's Firstsource Solutions buys U.S.-based MedAssist for US$330 million

India's Firstsource Solutions buys U.S.-based MedAssist for US$330 million

Indian outsourcing company Firstsource Solutions Ltd. has bought U.S. healthcare company MedAssist Holding Inc. for US$330 million (euro242 million), an acquisition intended to help the Indian firm boost it clientele among American hospitals.
Firstsource, which announced the all-cash deal Wednesday, provides insurance processing services to U.S.-based health insurers, and has been looking to expand its business by managing the administration, including cost management tasks, of U.S.-based hospitals.
"With this buy, we now will have a presence in the provider (hospitals) side of the space," Ananda Mukerji, managing director and chief executive of Firstsource, told Dow Jones Newswires.
MedAssist, based in Louisville, Kentucky, handles finance-related back-office work for the U.S. healthcare industry and employs 1,400 staff. It has over 1,000 clients including hospitals and large physician groups.
"With Firstsource, we will have tremendous financial strength and the opportunity to grow in both scale and reach that we would otherwise not be able to achieve both nationally and globally," Michael Shea, president and chief executive at MedAssist, said in a statement.
Currently, the hospital care market in the U.S. is worth about US$700 billion (euro515 billion) in revenue, and the administrative costs management market is worth about US$100 billion (euro73 billion), which provides a huge opportunity for Firstsource, Mukerji said.
"The buy will be earnings per share accretive in the fiscal year ending March 2009," Mukerji said. The acquisition would be funded through a mix of cash and debt, he said.
Firstsource shares rose 4 percent to 82.60 rupees in early trade on the Bombay Stock Exchange.


Updated : 2021-07-29 18:26 GMT+08:00