Global private equity major EQT has launched the sale process of its Washington and Chennai-based portfolio company, leading healthcare-focused revenue cycle management (RCM) firm AGS Health and is expecting a valuation in excess of $1 billion for the entire firm with preliminary interest shown by multiple private equity funds, multiple industry sources in the know told Moneycontrol.
The launch comes on the back of big-bang m&a activity in the RCM segment in the 8 months.
"The transaction was launched recently and management meetings have been held with multiple suitors. EQT has been invested for five years, has mandated JP Morgan and BofA as sell-side advisors and is expecting a premium valuation in excess of a billion dollars. AGS Health has a strong brand and is probably one of the last RCM assets on the block on a substantial scale," one of the persons above told Moneycontrol.
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Three other persons confirmed the above and added that private equity firms like Advent International, Hillhouse Investment, Apax Partners, General Atlantic, Blackstone, TPG and Carlyle likely express interest in the proposed deal.
All the four persons above spoke on the condition of anonymity to Moneycontrol.
When contacted, EQT, Advent International, Apax Partners, General Atlantic, Blackstone, TPG, and Carlyle declined to comment.
Moneycontrol could not elicit an immediate response from AGS Health, Hillhouse Investment, JP Morgan and BofA Securities. This article will be updated as soon as we hear from them.
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 per cent of the 20 most prominent US hospitals and 40 per cent of the 10 largest health systems in the US.
"There is a lot of bullishness on US healthcare amongst the global private equity funds, cost optimization is key and that's where RCM assets come in," a senior industry executive told Moneycontrol.
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.
Investment major EQT, which is backed by one of Europe's prominent industrial families, Sweden's Wallenberg's, listed its portfolio company Sagility India on the domestic bourses on November 12 and from its issue price of Rs 30/share, the stock has risen by 67.5 per cent so far.
In December, during a visit to India, Jean Salata, chairperson of EQT Asia and Head of Private Capital Asia said that the investment major which has invested more than $6 billion in India over the last 18 months, is keen on pricing its forthcoming public issues with an eye on creating value for all investors.
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