Apollo Group's global arm has acquired US-based Armanti Financial Services (AFS) for $31 million in a deal that makes the combined entity one of the largest healthcare processing companies in the hospital business for receivables management.
Apollo Health Street (AHS), the global healthcare service company of Apollo, announced the acquisition Monday.
Apollo Health Street offers healthcare focused business process outsourcing and IT services while Armanti, with its head office in New Jersey, is one of the largest hospital billing and receivable management companies.
Sangita Reddy, managing director, AHS, announced the acquisition at a news conference here in the presence of William Colgan, promoter and managing director, AFS.
The acquisition deal, through internal accruals, equity and debt will be completed in three years and AFS will remain a 100 percent subsidiary of AHS in United States.
"With this acquisition, the combined Apollo-AFS entity is now among the largest healthcare processing companies in the hospital and physician space, responsible for receivables management of over $1 billion annually," said Sangita Reddy.
"This acquisition brings together a global team of some of the most knowledgeable healthcare professionals and would help in expanding the scope of services to customers of both AFS and AHS," said William Colgan.
With US healthcare valued at $2 trillion and $380 billion of this going into back office operations, the combined entity will be leveraging its synergies to make the most of this huge opportunity.
With this acquisition, AHS is expected to increase its revenues to $45 billion in 12 months. The acquisition of two more US-based companies is in the pipeline, and with this the company hopes to push up revenues to $100 million in 18 months.
The combined entity, with 1,500 employees including 25 percent of them in the US, plans to enhance the numbers to 2,000 in the next year and to 2,750 in 18 months.
The Apollo Group invested $12 million in AHS, which is growing at over 70 percent since its inception three years ago. J P Morgan Chase and Co and Temasek Holdings are other investors in AHS.
Founded in 1998, AFS handles $1 billion healthcare receivables. Its annual revenues are $26 million and it is growing at 20 percent annually.
Sangita Reddy said AHS, one among top three healthcare companies out of India, aimed to become number one and the acquisition-led growth of the company is expected to be 50 to 60 percent.