Hinduja Global Solutions (HGS) has sold off its BPO business serving the healthcare industry to investment management firm Barings Private Equity, despite the fact that the unit accounted for 54% of the company’s revenue.
The Bangalore, India-based HGS says it will invest the proceeds in cutting-edge tech solutions on its way to become what it called a “digitally-enabled customer experience services” provider.
The divestment will indeed have an impact on the company’s operations in Jamaica as well as India. HGS’ healthcare unit employs more than 20,000 people across 34 delivery centers.
Partha DeSarkar, CEO of HGS, attributed the divestment to the company’s goal of “unlocking value” for shareholders.
The healthcare unit was sold for US$1.2 billion, three times the size of the company’s annual revenue of US$400 million.
In 2006, Hinduja Group similarly sold 5% of its stake in Hutchison Essar for US$450 million, gaining 20 times return on its initial investment.
Once the transaction is closed, HGS will transfer all client contracts as well as employees to Baring Private Equity Asia.
The investment firm has two similar BPOs in its portfolio, namely Citiustech, a healthcare technology services and solutions player, and AGS Health, a medical revenue cycle management provider.
HGS began its journey as Ashok Leyland Information Technology in 1993. It turned its focus on BPO in 2,000, when it was bought by Hinduja Group.