Wipro signs agreement to buy HealthPlan Services for $460 mn

Wipro   has signed a definitive agreement to acquire 100 percent stake in Healthplan Services from Water Street Healthcare Partners for USD 460 million. This marks the fourth acquisition by Wipro in the last one year. It is the IT major’s largest acquisition in last five years. HealthPlan Services employs over 2,000 and offers market-leading technology platforms and fully-integrated business process as a service (BPaaS) solution to health insurance companies. Since partnering with Water Street in 2008, HealthPlan has grown to become the leading independent technology and BPaaS provider in the US health insurance market. HealthPlan Services provides US payers with a diversified portfolio of health insurance products delivered through its proprietary technology platform. Wipro said this transaction is closely aligned with the company’s key levers for growth, which are to dominate the services market through industry utilities that multiple customers can use. “This acquisition adds another platform-led Business Process as a Service (BPaaS) offerings, delivered on cloud to Wipro’s services portfolio. Wipro’s clients currently include over 100 US payers, leading healthcare providers, and public health agencies,” Wipro said in a press release. “The partnership with HealthPlan Services positions Wipro to participate in the shift of the US health insurance industry towards a consumer-centric business model.  HealthPlan Services strengthens Wipro’s position in the health insurance exchange market while offering synergies with Wipro’s presence in the Managed Medicare and Commercial Group Insurance markets. The addition of HealthPlan Services’ capabilities complements Wipro’s strengths in claims processing and back office services. This is a strategic move for us, as it advances Wipro’s vision of leveraging unique insights into customer buying behavior and applying this across the healthcare value chain.  This will help us lower the cost of healthcare and transform the quality of the member experience,” the release said quoting Jeffrey Heenan Jalil, senior vice-president and head – Healthcare Life Sciences and Services, Wipro. This transaction is subject to customary closing conditions and regulatory approvals and is likely to be completed in next 60 to 90 days. Wipro stock price On February 11, 2016, Wipro closed at Rs 516.10, down Rs 16.2, or 3.04 percent. The 52-week high of the share was Rs 676.90 and the 52-week low was Rs 512.55. The company’s trailing 12-month (TTM) EPS was at Rs 33.50 per share as per the quarter ended December 2015. The stock’s price-to-earnings (P/E) ratio was 15.41. The latest book value of the company is Rs 140.14 per share. At current value, the price-to-book value of the company is 3.68.