: The Hinduja Group’s business process management entity, Hinduja Global Solutions Limited said on Thursday that it has completed the sale of its healthcare services business to wholly-owned subsidiaries of Betaine BV (‘Buyer’), funds affiliated with Baring Private Equity Asia (BPEA), one of the largest private alternative investment firms in Asia. The transaction was based on an enterprise value of $1,200 million, subject to closing adjustments, and resulted in inflows of $ 1,088 million.
The deal was originally announced in August 2021 and has now the transaction has been completed. As part of the divestment, HGS has transferred all client contracts and assets, including infrastructure related to the healthcare services business, to the Buyer. Over 29,000 employees from HGS across four geographies – the US, India, Jamaica, and the Philippines – will join the new organization, effective January 6, 2022.
As part of the Transition Services Agreement, the new healthcare organisation will operate under the name “HGS Healthcare” for 12 months from closing.
The strategic move
Explaining the strategic thought behind the deal, YM Kale, Chairman, Hinduja Global Solutions, stated, “This divestiture helps HGS unlock value and makes the capital available to grow the business of all the other verticals and divisions. It is the right time to refresh HGS' value proposition and evolve as a comprehensive digital and CX services partner to clients.”
Chairman Kale further added, “Completion of the transaction unlocks significant value for the shareholders and is a recognition of the path-breaking work that HGS has been doing in the last two decades in building its domain capabilities. The Board has approved an interim/ special dividend of ₹ 150/share and a bonus issue of 1 share for every share held, subject to necessary approvals.”
Partha DeSarkar, HGS Global CEO, said “HGS will now pivot to building its Digital Customer Experience Transformation Practice, focusing on the triple A’s of Automation, Analytics, and Artificial Intelligence, to create industry-specific solutions for the top global brands that HGS services. The acquisition of required talent for the above sectors is being planned. In the last two years, HGS has significantly expanded its footprint in the UK.
New brand identity
HGS recently unveiled a new brand identity aligned with its vision to be a digitally-led customer experience (CX) transformation organisation. This new brand identity represents HGS’ focus on continually creating more satisfying customer experiences, stronger employee engagement, and more rewarding investor outcomes.
HGS will use the funds generated from the divestment to strategically invest in building its technology capabilities for the future growth of the organization. HGS has been working with its Board to chart this new path of technology leadership. HGS is also exploring several acquisition candidates for the inorganic growth of its business.”
The board of directors of HGS in its meeting on Thursday , also declared a third interim dividend of ₹ 150/share in the nature of special dividend, and recommendation of issue of new Equity Bonus Shares in the proportion of 1 Equity Share of ₹ 10 each for every 1 Equity Share of ₹10 each, subject to the approval of the shareholders and other statutory and regulatory approvals, as may be necessary.
Post completion of the transaction, HGS will have around 18,800 employees and 34 delivery centres in the US, Canada, UK, Jamaica, the Philippines, and India. The company’s revenue run rate for Q4 FY2022 post divestment would be approximately $105-110 million per quarter.