The India's third largest software exporter, Wipro, has executed one of its largest acquisitions in the last decade and bought US-based healthcare technology services firm HealthPlan services for the US $460 Million. Wipro, which currently has a $800-Million healthcare and life sciences business, said that the acquisition would strengthen its position in the healthcare sector. The transaction includes a purchase consideration of $460 million, including a deferred consideration of $20 million.
The Wipro has taken this initiative after Abidali Neemuchwala took over as Chief Executive and internally laid out a vision to make Wipro a $15-billion company by 2020. In an official statement company said, "we have signed an agreement to acquire HealthPlan Services from Water Street Healthcare Partners, a strategic investor, for providing business process as a service in the US health insurance market".
Wipro also cleared that the transaction is subject to customary regulatory approvals and is expected to be completed in the next 60-90 days. HealthPlan, which was founded in 1970 and has three offices in Florida and two offices in Ohio, US, currently generates annual revenue of $223 Million implying more than a 2X valuation on the deal. The HealthPlan acquisition, which is Wipro's largest since it bought Infocrossing in 2007 for $600 million, also gives Wipro access to the company's back-office technology platform and a plethora of large healthcare insurance customers in the US, including Metlife and Allstate.
"The partnership with HealthPlan Services positions Wipro to participate in the shift of the US health insurance industry towards a customer-centric business model," said Jeffrey Heenan Jalil who heads Wipro's healthcare business. This is Wipro's fourth acquisition in the last six months and is part of the company's traditional "string of pearls" acquisition strategy. Over the past six months, Wipro has been on an acquisition spree and has bought at least three other companies -- Denmark-based Designit for 85 million euros, German IT consulting firm Cellent AG for 73.5 million euros and US-based Viteos Group for $130 million.