Medi Assist, the country’s leading health insurance third party administrator (TPA), is set to acquire 100% stake in Mumbai-based Medvantage Insurance TPA, one of the oldest TPAs that manages marquee corporate clients like Microsoft and Wells Fargo.
The companies last week signed a definitive agreement towards this merger and are now awaiting approval from sector regulator Insurance Regulatory and Development Authority (IRDA) for the same, three people familiar with the matter said.
The likely size of the deal is about ₹35 crore, industry insiders said. This could not be confirmed by either of the merging entities.
It is, however, learnt that Medi Assist will fund the deal using cash from its balance sheet.
The acquisition will help the country’s largest TPA to raise its market share in the corporate side of the business to 30% from 27%, Medi Assist chief executive Satish Gidugu said.
“Medvantage has over 100 high-quality corporate accounts which has prompted us to explore this acquisition,” Gidugu told ET. “We always explore inorganic growth and have more plans in the pipeline. The outlook to grow business across all segments – retail, corporate and government business – will drive our future strategy.” Medvantage (earlier known as UnitedHealthcare Parekh Insurance TPA) earned ₹30 crore revenue in 2021-22 and managed corporate premiums of ₹700 crore.
“As the industry evolves, scaling up any business becomes important,” Medvantage chairman Nimish R Parekh told ET. “Given the size of our business, it is difficult to scale it up. That’s why we thought of a strategic fit for our existing stakeholders, and Medi Assist fits this perfectly.”
The merger will provide Medvantage customers access to Medi Assist’s cashless hospital network, OPD services, and a slew of offerings like navigator (for out-of-pocket cost estimation, financing, etc) which are in the pipeline, the company said.
Medi Assist had earlier acquired Dedicated Healthcare Services TPA in 2016 and Medicare TPA in 2018.
Founded in 2000, Medi Assist has built a pan-India network of hospitals, developed technologies to improve claims settlement cycle and deployed mobile applications to simplify policyholder access and experience. In FY22, it earned a revenue of ₹400 crore and managed a total premium of over ₹11,000 crore including ₹9,500 crore of corporate premiums.
Source: Economic Times