Shares of Hinduja Global Solutions (HGS) were locked in a 5 per cent upper circuit after the company announced that it has entered into definitive agreements to divest its Healthcare Services business to funds affiliated with Baring Private Equity Asia (BPEA), one of the largest private alternative investment firms in Asia.
The transaction based on enterprise value of US$ 1,200 million, subject to closing adjustments, is expected to complete within 90 days, subject to shareholder and other regulatory approvals.
The stock ended 5 per cent higher at Rs 3,235.85 against the previous close of Rs 3,081.80. Market cap of the firm rose to Rs 6,756.75 crore on BSE.
It has gained 385 per cent in the last year and risen 186 per cent since the beginning of this year. The share stands higher than 100 day, and 200 day moving averages and lower than 5 day, 10 day, 20 day, 50 day moving averages.
“Our Healthcare Services business has steadily grown over the years. We reached a stage where we could recommend to promoter to divest stake in this business to unlock value for all HGS stakeholders. We will use the generated funds to strategically invest for the future growth of the organization,” said Partha DeSarkar, Global CEO, HGS.
We see a long-term value and benefit to HGS in doing so. HGS will continue to focus on aggressively expanding its CES and Digital businesses in
line with our goal to transform itself into a ‘digitally-enabled customer experience (CX) company,” he added.
Jimmy Mahtani, Managing Director, BPEA, said “We have been investing in the Technology Services sector for more than two decades and have long-admired HGS as a leading specialist Healthcare Services provider. We are excited to now have the opportunity to partner with CEO Ramesh Gopalan and his team to help take HGS’ Healthcare Services business to the next level as a new independent company.”
“This will be our seventh investment in the sector and third in Healthcare Technology Services following previous investments in CitiusTech and AGS Healthcare, and we continue to be excited about the digital transformation opportunity in the space,” he added.
“HGS will focus on strengthening its Consumer Engagement Solutions (CES), HGS Digital and HRO/ Payroll businesses that support several top global brands across its nine verticals. Services to healthcare clients delivered by the HGS Digital and HRO/ Payroll businesses will continue to be part of HGS’ portfolio,” the company said.
“Post completion of the transaction, HGS will transfer all client contracts, employees, and assets, including infrastructure related to the
Healthcare Services business,” it added.