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Swedish Private Equity fund EQT has signed an agreement with homegrown PE fund ChrysCapital to acquire GeBBS Healthcare Solutions, a leading provider of revenue cycle management (RCM) services and risk adjustment solutions, said a press statement today. ET was the first to report that EQT is signing a deal to acquire GeBBS on September 5. According to sources, EQT acquired 100% stake in GeBBS for about $860-870 million, though the financial details were not disclosed by the parties.
Asia-focused PE fund Hillhouse Investment was another contender in the race for the US-based GeBBS. In one of the leading exits in the BPO sector, ChrysCap has reaped a 4X return from its 6-years old investment in GeBBS. ChrysCap acquired an 80% stake in GeBBS in 2018 for $140 million, at a valuation of $175 million.
Established in 2005, GeBBS is a technology-driven solution provider to hospital systems and payers in the US. GeBBS helps clients optimize their organizational workflow, improve financial performance, adhere to compliance, and enhance the overall patient experience. The US healthcare industry is a large market with multiple stakeholders and complex structures.
These complex structures underpin the need for higher RCM spending, added the statement. Research suggests that the RCM services outsourcing market is estimated to reach $28 billion and grow at 8 - 9% CAGR. This market opportunity has allowed offshore vendors, such as GeBBS, with a broad portfolio of solutions, to witness significant tailwinds, driven by cost pressures and lack of talent onshore, it said.
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Jefferies and Avendus Capital are running the mandate for ChrysCapital. GeBBS has posted a revenue of about $200 million and an EBITDA of $50 million in FY24, said sources. After the ChrysCap acquisition, the Company expanded its portfolio of offerings through strategic acquisitions, including Aviacode in 2021, CPa in 2023, MRA in 2023, and CCD Health in 2024.
The company has grown to over 13,000 employees with delivery centres in India, the Philippines, the USA, and the Dominican Republic. The portfolio of solutions also includes AI-powered tools for coding compliance, autonomous coding, automation of accounts receivable, and streamlined workflows for risk adjustment, said the statement. GeBBS competes with companies like Wipro , IBM, Cognizant, Hewlett Packard, Quintiles IMS Holdings, AGS Health, Accenture, DSM Pharma and Xerox.
"As seasoned investors in Enterprise Technology, we recognized the secular tailwinds in RCM quite early and chose to back a leader in GeBBS, particularly impressed by their sharp focus on engaging directly with the end-clients. The acquisition by EQT assures a bright future for the company and its employees. We wish them the very best,” said Akshat Babbar, Managing Director, ChrysCapital Advisors.
“Healthcare technology is a key investment theme for EQT. GeBBS has developed a robust business with a clear focus on supporting healthcare providers through industry leading solutions. We see strong alignment between GeBBS’ growth ambitions and EQT’s experience in creating long-term value.
We look forward to supporting the team through EQT’s proven value creation playbook to further accelerate GeBBS’ growth momentum,” said Hari Gopalakrishnan, Partner in the EQT Private Capital Asia advisory team and Head of EQT Private Capital India. EQT (formerly Baring PE Asia) also owns AGS Health, a medical revenue cycle management (RCM) company and a competitor of Gebbs. Baring PE Asia had acquired AGS in 2019 for $320 million.
AGS Health team of 12,000 staff serves more than 150 customers spanning a variety of care settings and specialties. Earlier in June, EQT had joined hands with ChrysCapital to acquire Credila Financial Services, the educational loan arm of Housing Development Finance Corp (HDFC), for a consideration of Rs 9060 crore. (You can now subscribe to our Economic Times WhatsApp channel ).
