$1bn plus race for EQT-promoted AGS Health: Blackstone, TPG-General Atlantic consortium and others move to next round

Founded in 1991, Frazier Healthcare Partners is a US private equity firm focused exclusively on the healthcare industry.

A clutch of at least three separate bidders have been shortlisted for the next round in the ongoing sale process of leading healthcare-focused revenue cycle management (RCM) firm AGS Health, a portfolio firm of global private equity major EQT, multiple industry sources in the know told Moneycontrol.

On February 5, Moneycontrol was the first to report that EQT had mandated JP Morgan and BofA Securities as advisors and launched the sale process expecting a premium valuation in excess of a billion dollars.

" There have been back-to-back deals in the RCM segment over the last year, and this is one of the last assets available in the segment with scale and there were a lot of bids in the initial round. Blackstone, a consortium of TPG and General Atlantic and Frazier Healthcare Partners are part of the shortlisted parties for the next stage," said one of the persons above.

A second person confirmed the above and added that the shortlisted suitors would now conduct due diligence on the proposed transaction.

There is industry speculation of Carlyle and Vitruvian Partners being picked as well but Moneycontrol could not independently confirm their selection.

Both the persons above spoke to Moneycontrol on the condition of anonymity.

When contacted, EQT, Blackstone and General Atlantic declined to comment. Moneycontrol has sent email queries to TPG and Frazier Healthcare Partners and is awaiting a response. Carlyle and Vitruvian Partners couldn't be reached for an immediate comment. This article will be updated as soon as we hear from these firms.

The February 5 report by Moneycontrol had mentioned that Blackstone, TPG and General Atlantic were likely to express interest in the deal. The report had also named Carlyle, Advent International, Hillhouse Investment and Apax Partners as likely suitors.

Founded in 1991, Frazier Healthcare Partners is a US private equity firm focused exclusively on the healthcare industry. According to its website, it has raised over $11 bn of capital for private funds and co-investment opportunities and has invested in more than 200 companies.

EQT Private Capital Asia ( formerly Baring Private Equity Asia) acquired Washington and Chennai 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 per cent of the 20 most prominent US hospitals and 40 per cent of the 10 largest health systems in the US.

RCM Deal Rush

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 $2 billion and the buyout of Goldman Sachs and Everstone backed Omega Healthcare by Ontario Teachers Pension Plan for around $1.8 billion.

In December, during a visit to India, Jean Salata, chairperson of EQT Asia and Head of Private Capital Asia said that the buyout market is "underpenetrated" in India and the investment major which has invested more than $6 billion in India over the last 18 months, seeks to replicate the success achieved by the firm earlier in the IT services segment with similar, control deals in the healthcare and financial services segment.