Chennai-Based healthcare IT services company Helios & Matheson is targeting a $50-100 million all-cash buyout in Europe. It is in talks with two companies, one in Brussels (Belgium) and the other in Paris. The company hopes to close the deal by end of this fiscal.
“We are looking at a foothold in Europe. The company has a cash reserve of Rs 85 crore. Another Rs 60-70 crore can be raised through internal accruals. We plan to complete the transactions in three phases (in two years time) but all through cash. We can also borrow from banks, if there is a need, “ said Helios & Matheson MD GK Muralikrishna told ET.
Helios and Matheson has so far acquired three companies in the US — The Laxmi Group in California (2001), Maruthi Consulting Inc (2004) and The A Consulting Team (now renamed Helios & Matheson, US in 2006).
All three have been all-cash buyouts. One of the company’s US subsidiary is listed on Nasdaq. It now wants to strengthen its presence in the European market. The company registered a turnover of Rs 395 crore last year and targeting a revenue of Rs 2,000 crore by 2010. About 40% of the company’s revenue comes from healthcare services.
The Indian company is looking at a pureplay European IT company which operates in the healthcare sector. Globally, the healthcare outsourcing market is around $80 billion. Indian healthcare IT service providers have so far tapped about 2-3% of this market.
But as the healthcare expenses mount in the US and European countries, Indian healthcare IT service providers are upbeat about their growth. In India, companies such as Perot Systems and EDS also provide healthcare IT services in the US and European companies.
Indian corporate hospitals too have been trying to get a pie of this market and have been negotiating with insurance companies for outsourcing radiology work to India. Last month, Apollo Health Street (AHS), healthcare outsourcing arm of the Apollo Group, acquired the Atlanta-based BPO and enterprise support solutions company, Zavata for Rs 697 crore.
Helios & Matheson recently started operations at a SEZ near Chennai with an investment of Rs 35 crore. The 500 seat capacity centre can be scaled up to 3,000. The company plans to increase its employee strength from 1,600 to 3,000 by 2009.
Source: Economic Times