US-based private equity firm TA Associates, which has been actively exiting investments in India over recent months, announced on Tuesday an undisclosed investment in revenue cycle management (RCM) services provider, Vee Healthtek.
This acquisition marks TA Associates' debut in the RCM space in India and its second bet in the Indian healthcare IT sector, following its 2022 investment in Chennai-based Zifo Technologies, a global provider of informatics solutions for research-based organisations.
The deal also represents TA Associates' second majority stake investment in India, following its acquisition of a controlling interest in OmniActive Health in 2023. Typically, the PE firm focusses on minority stake investments in the country.
TA Associates will play a pivotal role in Vee Healthtek's growth, both organically and through strategic acquisitions, said Chocko Valliappa, founder and chairman of Vee Healthtek, in a statement.
While the financial details of the transaction were not disclosed, The Economic Times earlier reported that TA Associates will hold a significant majority stake for $250 million (approximately Rs 2,100 crore).
Bengaluru and US-based Vee Healthtek is owned by South India-based Sona Group, which operates across sectors such as biotech, construction, IT, plantation and real estate.
Vee Healthtek offers a range of services, including revenue cycle management, professional billing and IT services, catering to hospitals, health systems, and pharmaceutical companies globally.
To be sure, revenue cycle management is process provided by healthcare players that involves managing and collecting payments across various steps. These include patient registration, insurance claim submission, patient billing and financial reporting and analysis.
For the year ended March 2024, Vee Healthtek reported standalone net sales of Rs 347.2 crore, up from Rs 315 crore in the previous year.
Its net profit rose marginally to Rs 79.3 crore from Rs 78.4 crore during the same period, according to VCCEdge, the data intelligence platform of VCCircle.
This acquisition highlights growing private equity interest in healthcare IT, coming on the heels of recent deals in the sector.
Swedish private equity major EQT recently acquired a controlling stake in healthcare technology services provider GeBBS Healthcare Solutions from Indian PE firm ChrysCapital for $800 million.
Earlier in May, KKR & Co acquired a minority stake in Infinx Services Pvt. Ltd, an AI-driven healthcare revenue cycle solutions provider.
Goodwin Proctor LLP and Pioneer Legal served as legal advisers to TA on the transaction. Avendus Capital served as the financial adviser, and Shardul Amarchand Mangaldas and K&L Gates served as legal advisers to Vee Healthtek.
The transaction has received all relevant regulatory approvals.
TA Associates typically invests in companies operating in technology, healthcare, financial services, consumer and business services sectors. The PE firm invests in India out of its global funds.
TA Associates just like last year has been quite active in liquidating some of its investments. The PE firm pressed on the sell button on a seven-year-old portfolio company in February this year.
It diluted a part of its stake in Shilpa Medicare Ltd. Last year, the PE firm struck a large exit deal to sell its entire holding in Indira IVF to EQT via a secondary transaction.
In July this year, TA Associates had made a strategic growth investment in Vastu Housing Finance.