US-based Sutherland Global Services - a business process outsourcing (BPO) firm - will acquire Apollo Health Street Ltd. in order to scale up its healthcare business services.
This was revealled by an official. "The US healthcare market is growing. Last few years we have been investing in healthcare market. Both Sutherland and Apollo Health are in the same business in healthcare... Hence we found it to be a good match," Dilip Vellodi, founder chairman and chief executive officer (CEO) of Sutherland told IANS over phone from the US.
Vellodi declined to confirm or deny the market information that Sutherland will be paying around Rs.1,000 crore for Apollo Health to the Apollo Hospitals group.
"All I can say is that it is an all-cash deal. It is a fair price. We are not paying more or less," Vellodi said.
He said Apollo Health has around 3,000 people on its rolls having deep domain knowledge in their respective fields.
Apollo Health provides customised strategic support services to more than 150 healthcare partners throughout the US from 10 global operational centres of excellence.
"Sutherland's healthcare services and operations of Apollo Health complement each other. Both the companies are in the same space. With this acquisition, Sutherland addresses the central challenge facing major north American and European healthcare providers... to provide exceptional services to patients in a cost-effective manner," Vellodi said.
The sale transaction is expected to be completed by February 2013 subject to regulatory clearances.
Sutherland feels that the acquisition will position the combined organisation as a leading healthcare service provider in the $38 billion US healthcare BPO market.
He said Apollo Health will be integrated with Sutherland soon as there will be no need to have two organisations in the same vertical and added that there will be no rationalisation of headcount at the acquired outfit.
According to him, the healthcare vertical is growing and acquisition was one fast way of scaling up the business.
"We have been growing our business organically and not through acquisitions. We will continue to grow organically," Vellodi said.
With Apollo Health in the bag, Sutherland hopes to generate around 15 percent of its next year's turnover from its healthcare vertical.
"Our average annual growth rate is around 20 percent. We target closing 2013 with a topline of around $900 million. We hope to close 2012 with revenue of $700 million," Vellodi said.
According to him, Sutherland will not be adding headcount in a linear fashion. However, there will be an increase in headcount based on requirement.
Sutherland has over 30,000 employees globally working out of 35 operations centres in the United States, the Philippines, India, UAE, Egypt, Bulgaria, UK, Canada, Jamaica, Mexico and Colombia.
In a statement, Prathap C. Reddy, founder chairman of Apollo Hospitals, said: "In order to drive Apollo Health Street's growth to the next stage of its evolution, it was essential to find the right strategic partner. In Sutherland, we found the ideal partner with a proven track-record of excellence in services, technology and leadership. The combined capabilities of both companies will create a compelling value proposition for our clients."