Global private equity firms Blackstone Inc., General Atlantic and TPG Capital are moving in to acquire revenue cycle management firm AGS Health for around $1 billion, said two people with knowledge of the deal.
The deal process, launched earlier this year, is likely to conclude next quarter, the people said, speaking on the condition of anonymity.
“The AGS deal has progressed to the second round and, currently, due diligence is being carried out,” the first person cited above said. According to him, the deal will likely reach final stages in the next 6-8 weeks.
Emailed queries to TPG did not elicit any response. A Blackstone spokesperson, and General Atlantic and EQT declined to comment.
The EQT portfolio company, based out of Washington and Chennai, joins the long list of revenue cycle management (RCM) firms that have found interest among these risk investors. This is one of the last RCM firms out of India that is up for grabs after New Mountain Capital acquired Access Healthcare in January. The same month, Ontario Teachers Pension Plan bought Omega Healthcare.
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EQT, formerly Barings Private Equity Asia, acquired AGS in 2019 for $320 million. The global private equity (PE) firm has mandated investment banks JPMorgan and Bank of America (BofA) to help it find buyers, the second person cited above said.
AGS provides a host of services, including medical billing, claim submission, denial management and medical coding. It works with healthcare providers and insurance companies to help them increase profitability, scalability, and compliance. The company employs 13,000 RCM experts who support over 150 customers spanning a variety of care settings and specialties, including nearly half of the 20 most prominent US hospitals and 40% of the nation’s 10 largest health systems.
As per an Economic Times news report, the company had annual revenues of around $50-60 million in FY24.
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As large buyout funds focus on investing in high-growth-dollar-generating assets, revenue cycle management companies have seen a lot of traction from these investors. In the last 12-18 months, companies such as GeBBS Healthcare, Acces Healthcare, Omega Health, among others, have found new owners. TA Associates acquired a Chennai-based Vee Healthtek for $250 million in November, while EQT acquired GeBBS Healthcare in September.
