Also signs a five-year Rs 1,110-crore agreement.
Patni Computer Systems, the Mumbai-based IT services provider, today signed a definitive agreement to acquire CHCS Services, a wholly-owned subsidiary of Universal American Corp.
Patni also signed a multi-million dollar, five-year agreement to provide end-to-end policy administration services to Universal American, a health insurance company in the US. Universal American is an existing client of Patni.
Patni declined to disclose the financial details of both transactions. Industry analysts, however, estimate the five-year deal to be around $250 million (around Rs 1,100 crore).
The acquisition is expected to allow Patni gain a presence in Pensacola, Florida and establish a new line of business as a Third-Party Administrator (TPA) in the insurance and healthcare sector. This, said a company release, would significantly enhance its existing business process outsourcing (BPO) capabilities to deliver end-to-end platform based solutions and TPA services to insurance providers’ back-office transactions.
“This represents the largest win in the company’s history and this strategic acquisition of CHCS Services is a strong validation of Patni’s differentiated micro-vertical strategy. This move takes on dual significance for Patni in terms of growing our global Life and Healthcare Insurance business as well as establishing us as a TPA,” said Jeya Kumar, CEO, Patni.
Patni will add to its onshore delivery capability in North America, where it already has centres in Bloomington, Illinois and El Paso, Texas, in addition to its near shore centre in Mexico.
According to the Nasscom-McKinsey Perspective 2020, healthcare is one of the four verticals that will emerge as the biggest opportunity for outsourcing services. The outsourced healthcare space represents an approximately $17-billion opportunity in the US alone. The industry is expected to grow at over 50 per cent CAGR (compound annual growth rate) in next five years.
“This acquisition is a major milestone in our endeavor to expand our platform-based offerings. Continuing our innovation-led strategy, we will deliver significant IP-led differentiation around this platform to leverage both, IT best practices for complete lifecycle of application management and to also bring in efficiencies, based on operational best practices for full policy lifecycle management,” said Ganesh Iyer, SVP and Global Head – BFSI, Patni.
