Agile Equity: Transactions

$330,000,000 - Firstsource Solutions, Ltd (NSE:FSL) Acquires MedAssist Holding, Inc.

Agile Equity represented Firstsource Solutions in this cross-border M&A engagement. Agile sourced the target MedAssist and assisted with valuation, structuring, negotiation, due diligence and closing the transaction.

SYNOPSIS:

  • Firstsource enters into an agreement to acquire MedAssist Holding, Inc. for US $330 million
  • MedAssist Holding, Inc., is a leading provider of revenue cycle management in the healthcare industry in the U.S.
  • Provides Firstsource an entry into the provider segment of the US healthcare BPO industry.

    • Mumbai, August 29, 2007

    Firstsource Solutions today announced that it has entered into an agreement to acquire MedAssist Holding, Inc., a leading provider of revenue cycle management in the healthcare industry in the U.S. The acquisition is valued at US $330 million and is subject to regulatory approval under the US HSR statute.

    MedAssist, headquartered in Louisville, Kentucky has 1,400 employees and is a pan-American provider of revenue cycle management services to the healthcare industry. This includes Eligibility Services, Receivables Management Services and Post-default Collections services for healthcare providers. The company has over 1,000 clients including hospitals, large physician groups and alternate site providers. MedAssist's revenue for year ended Dec. 31, 2006 was US $99 million.

    The MedAssist acquisition presents significant synergies for Firstsource. Firstsource, which already has a strong presence in the US healthcare BPO space on the payor side (insurance company end) will now also enter the provider side (hospitals end) of healthcare BPO services. Currently, hospital care in the US amounts to approx. US $700 billion* and administrative costs are estimated to be 14%, or US $100 billion, which is a huge opportunity. Revenue and cost pressure on healthcare providers is increasing. Hence, providers are increasingly outsourcing multiple elements of their revenue cycle to increase revenues (by reducing uncompensated care) and contain cost. MedAssist's capabilities provide Firstsource with a pan-American presence in this provider segment, consisting of over 5,000 hospitals nation-wide.

    Commenting on the acquisition Ananda Mukerji, Managing Director & CEO, Firstsource said, "The healthcare space in the US is a tremendously attractive market from a BPO perspective. Firstsource already has a significant presence in the payor side of the market. This acquisition gives us access to the equally large provider side. MedAssist has an attractive portfolio of service offerings, an excellent customer base and a strong management team. We see significant opportunity to grow our business in the segment by cross-selling Firstsource's services to MedAssist's customers."

    Michael Shea, President and CEO, MedAssist said, "Becoming part of the Firstsource family is a very positive step for our customers and employees. The entire MedAssist management team is excited about the synergies that we will be able to bring to our clients as we continue to introduce innovative solutions in a cost effective manner to the healthcare market. With Firstsource we will have tremendous financial strength and the opportunity to grow in both scale and reach that we would otherwise not be able to achieve both nationally and globally."

    Firstsource's current clients in the healthcare industry include three "Fortune 100" US healthcare insurance companies. Firstsource provides end-to-end services, including mail and document management services, policy administration, claims processing, claims pricing, claims adjudication, and adjustment, and healthcare provider database maintenance. Its key strengths within the healthcare sector are end-to-end services, proprietary platforms and deep domain expertise. Income from services to healthcare clients represented 13.7% of Firstsource's revenues for quarter ended June 30, 2007.

    Firstsource stated that there would be no change in the management of MedAssist and all employees would continue in
    their current jobs.

    About Firstsource

    Firstsource (NSE: FSL.NS, Reuters: FISO.BO, Bloomberg: FSOL@IN ) is among India's leading BPO (business process outsourcing) service providers. Firstsource provides customized business process management to global leaders in the Banking & Financial Services, Telecom & Media and Healthcare sectors. Its 75 clients include six "Fortune Global 500" banks, two "Fortune Global 500" telecommunications companies and three "Fortune 100" healthcare companies. Firstsource has a global delivery model with operations in India, US, UK & Argentina and Philippines. (www.firstsource.com)

    For information contact:

    Vrinda Walavalkar
    VP, Corporate Communications
    Tel: 92-22 5666 0888/0841/0641
    Email: vrinda.walavalkar@firstsource.com

    Chaitali Raval / Hemant Batra
    Adfactors PR
    Tel: (91) 9819221637/ (91)9820325109
    Email:Chaitali@adfactorspr.com/ hemantb@adfactorspr.com