Apollo arm buys out US BPO

Written by Corporate Bureau | Chennai, Aug 30 | Updated: Aug 31 2007, 05:12am hrs
Apollo Health Street (AHS), a group company of Apollo Hospitals, has brought out Atlanta-based Zavata Inc, a leading BPO and enterprise support solutions company, for around $170 million (over Rs 697 crore). This acquisition makes AHS the largest healthcare outsourcing solutions provider in India.

The deal works out to 10 times of the EBITDA margin of Zavata ($17 million). This is the fourth acquisition by AHS with the company earlier acquiring EMed Life, HWS and Armanti Financial Services.

The promoters of AHS - Apollo Hospitals, One Equity Partners (JP Morgans investment arm), Temasek Holdings, among others, are picking up the entire equity portion for $50 million (over Rs 200 crore) of which Apollo Hospitals alone is investing $25 million. The debt portion of $140 million is being funded by Bank of India and Barclays Capital, said Pratap C Reddy, chairman of Apollo Hospitals group.

Addressing a press conference here on Thursday, Reddy said, The combined entity would be the largest healthcare BPO company in India with further capabilities in providing enterprising support services. Zavata also offers complementary services, including expertise in areas such as full business office and emergency medical transport billing.

Sangita Reddy, managing director of AHS, said, We have proved that AHS can easily integrate acquisitions with itself and has the capabilities to grow organically and inorganically. Zavatas annual run rate is estimated to be in the range of $70-80 million, she added.