Tech Mahindra, India’s fifth-biggest software services exporter, has agreed to acquire CJS Solutions Group, an American IT consulting service provider for the healthcare industry.
Jacksonville, Florida-based CJS, which operates as the HCI Group, specializes in the implementation of electronic medical records (EMR) software.
Tech Mahindra will acquire an 84.7% stake in the U.S. firm by paying $89.5 million upfront, and picking up the remaining 15.3% over the next three years. HCI made $114 million in revenue for the 12-month period ending 30 September 2016.
With more than 500 professionals, HCI Group runs offices in the Middle East and Asia Pacific as well. The acquisition helps Tech Mahindra cross-sell its own IT solutions to about 30 large clients of the U.S. firm.
“Healthcare is one of the few sectors globally that is driving adoption of digital technologies,” said C P Gurnani, CEO of Tech Mahindra. “The acquisition will not only position Tech Mahindra as a significant player in the healthcare provider space, but will also provide an opportunity to go deeper in this space via EMR implementation.”
HCI also provides training and tech support services for healthcare service providers, as well as insurance companies.
Analysts say the purchase does not benefit Tech Mahindra much in terms technology. Moreover, the healthcare and life science business accounts for barely 7% of Tech Mahindra’s revenue.
Over the past few years, Indian tech companies have purchased several American firms with a client base in U.S. healthcare sector in a bid to snap up more IT service contracts stemming from the U.S. Affordable Care Act. Cognizant’s $2.7 billion purchase of TriZetto Corp is the biggest among their acquisitions.