Blackstone emerges as lead contender for mega $1.1 bn-$1.3 bn buyout of EQT-promoted AGS Health

Blackstone emerges as lead contender for mega $1.1 bn-$1.3 bn buyout of EQT-promoted AGS Health

Global private equity giant Blackstone has emerged as the front-runner in the ongoing big-bang sale process of EQT-owned healthcare IT services firm AGS Health, three persons in the know told Moneycontrol on the condition of anonymity.

"Post the submission of binding bids last week, Blackstone has edged ahead of other bidders and is now seen as the lead candidate to bag the deal. A final call is yet to be taken," said one of the persons above.

Two other persons confirmed the above.

"The valuation is expected to be in the region of $1.1 bn to $1.3 bn," one of them added.

A consortium of TPG and General Atlantic, Frazier Partners and Vitruvian Partners were seen as the other three key suitors for the proposed acquisition.

When contacted , EQT declined to comment in response to an email query from Moneycontrol. An email query to Blackstone remained unanswered at the time of publishing this article. This article will be published as soon as we hear from the firm.

On April 24, Moneycontrol had reported that a clutch of suitors, including Blackstone, Frazier Partners and the TPG-General Atlantic combine had moved to the next round for due diligence.

On February 5, Moneycontrol reported that EQT had mandated JP Morgan and BofA as sell-side advisors. AGS Health has a strong brand and would attract interest from multiple suitors as it is one of the last RCM (revenue cycle management) assets on the block with substantial scale, the report highlighted.

The deal comes at a time when the RCM segment has seen frenetic M&A activity in the last year.

EQT Private Capital Asia (formerly Baring Private Equity Asia) acquired AGS Health in 2019 for $320 million.

According to the LinkedIn page of AGS Health, the firm employs 13,000 RCM experts who directly support more than 150 customers spanning a variety of care settings and specialities, including nearly 50% of the 20 most prominent US hospitals and 40 per cent of the 10 largest health systems in the US.

The RCM space has seen a flurry of deals in the last year including the sale of ChrysCapital owned GeBBS Healthcare to EQT for more than $850 million, the sale of a majority stake in Chennai to Texas based Anurag Jain led Access Healthcare to New Mountain Capital for about $2bn and the buyout of Goldman Sachs and Everstone backed Omega Healthcare by Ontario Teachers Pension Plan for around $1.8 billion.