A major deal is unfolding in the healthcare industry as several top investment firms compete to buy AGS Health, a leading revenue cycle management (RCM) company currently owned by global investment firm EQT. According to sources, at least three major bidders have made it to the next round of the sale process.
On February 5, first reported that EQT had hired JP Morgan and BofA Securities to manage the sale, with expectations of a deal worth over $1 billion.
One industry insider said, “There has been a wave of deals in the RCM sector lately. AGS Health is one of the last big companies left in this space, so there was strong interest in the initial round.” The shortlisted bidders include:
- Blackstone
- A TPG and General Atlantic consortium
- Frazier Healthcare Partners
These companies will now move to the due diligence phase, where they’ll closely examine AGS Health’s financials and operations before making final offers.
There are also rumors that Carlyle and Vitruvian Partners might have been shortlisted, but this hasn’t been confirmed yet.
When contacted, EQT, Blackstone, and General Atlantic did not comment. Queries were sent to TPG and Frazier, while Carlyle and Vitruvian could not be reached.
Earlier in February, It had already hinted that Blackstone, TPG, and General Atlantic were likely to join the race. Other names mentioned as possible contenders included Advent International, Hillhouse Investment, and Apax Partners.|
Read More: Why Syngene International’s Net Profit Dropped 2.81% – Read the Full Story!
About the Bidders and AGS Health:
- Frazier Healthcare Partners is a US-based private equity firm that only invests in healthcare. Since its founding in 1991, it has raised over $11 billion and invested in over 200 companies.
- AGS Health, which has 13,000 employees, was bought by EQT in 2019 for $320 million. The company serves over 150 clients, including nearly half of the top 20 US hospitals and 40% of the 10 largest US health systems.
What’s Happening in the RCM Sector?
The RCM industry (which helps hospitals manage billing and payments) has seen a lot of big deals recently:
- GeBBS Healthcare (owned by ChrysCapital) was sold to EQT for $850 million.
- Access Healthcare (Chennai-based) sold a majority stake to New Mountain Capital for $2 billion.
- Omega Healthcare was bought by Ontario Teachers’ Pension Plan for $1.8 billion.
During a recent visit to India, Jean Salata, head of EQT Asia, said that India’s buyout market is still growing. EQT has invested over $6 billion in India in the past 18 months and now aims to do more healthcare and finance-related deals like it did earlier with IT services companies.
