Wipro said on Thursday it would acquire HealthPlan Services for $460 million (about Rs 3,150 crore), a move that will help the country's third-largest software services firm strengthen its position in the US health insurance market.
Wipro to acquire HealthPlan Services from Water Street Healthcare Partners, a strategic investor focused exclusively on the health care industry, the Indian software firm said in a statement.
As part of the agreement, Wipro will acquire 100 per cent of HealthPlan Services' shares for a purchase consideration of $460 million, it added.
Headquartered in Florida, US, HealthPlan is a leading independent technology and Business Process as a Service (BPaaS) provider in the US health insurance market.
HealthPlan Services employs over 2,000 associates. It offers technology platforms to health insurance companies (payers) in the individual, group and ancillary markets. It connects its payer clients to over 40 public exchanges and over 150 private exchanges in the US.
By partnering with HealthPlan Services, Wipro gains 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, Wipro said in a statement.
Wipro's clients currently include over 100 US payers, healthcare providers, and public health agencies, it added. The Patient Protection and Affordable Care Act has dramatically altered the health insurance landscape in the US.
The post-reform individual market is growing at a fast pace and is expected to continue to grow in coming years. The partnership with HealthPlan Services positions Wipro to participate in the shift of the US health insurance industry towards a consumer-centric business model, Wipro Senior Vice President and Head - Healthcare Life Sciences and Services, Jeffrey Heenan Jalil said.
The acquisition strengthens Wipro's position in the health insurance exchange market while offering synergies with its presence in the managed medicare and commercial group insurance markets, he added. The addition also complements Wipro in claims processing and back office services.
This is a strategic move for us... This will help us lower the cost of healthcare and transform the quality of the member experience, he said. This transaction, subject to customary closing conditions and regulatory approvals, is likely to be completed in next 60 to 90 days.
Finance solutions accounted for 26.2 per cent of Wipro's revenues in the October-December 2015 quarter, while healthcare, life sciences and services contributed 12 per cent. The purchase is in line with the company's string of pearls acquisition strategy. In December last year, it acquired two companies-Cellent of Germany for $77 million and US-based Viteos Group for $130 million.