Wipro has reached a deal with U.S.-based Water Street Healthcare Partners to acquire its subsidiary, HealthPlan Services, for $460 million and deepen its presence in the lucrative and expanding healthcare outsourcing market in the United States.
With over 200 employees, HealthPlan is a technology and business-process-as-a-service (BPaaS) provider. Florida-based HealthPlan offers technology platforms to health insurance companies (payers), connecting its clients to hundreds of both public and private exchanges across the United States.
This is Wipro’s third acquisition in as many months. In December last year, it purchased Germany-based Cellent for $77 million and then U.S.-based Viteos for $130 million. European pharmaceutical company Boehringer Ingelheim is one of the major clients of Cellent.
Compared with Europe, American healthcare market is huge and worth about a staggering $20 billion. And these days, following the implementation of Affordable Care Act, many expect large growth in the healthcare outsourcing sector as the government offers insurance cover to millions of Americans.
Healthcare accounts for 12% of Wipro’s overall revenue, contributing more than $1 billion to its coffers annually. The Bangalore-based outsourcer is aiming to increase this to $2 billion by 2018.
“The partnership with HealthPlan Services positions Wipro to participate in the shift of the U.S. health insurance industry towards a consumer-centric business model,” said Jeffrey Heenan Jalil, senior vice president at Wipro and head of its healthcare life sciences and services.
Wipro claims that its clients include more than 100 U.S. payers, healthcare providers, and public health agencies. Two years ago, Wipro made a bid to acquire U.S.-based healthcare ousourcing technology solutions firm TriZetto, but the negotiation fell through, leading Cognizant to make the purchase for $2.7 billion.