SPAC scrapped, Baring puts CitiusTech on the block for $2.2 bln


Less than a year after calling off plans for a SPAC listing in the US, Baring Private Equity Asia (BPEA) is all set to sell its controlling stake in healthcare analytics firm CitiusTech.

BPEA is engaged in talks with a clutch of global buyout funds including Blackstone, TPG and KKR to sell CitiusTech in a deal valuing the firm at around $2-2.2 billion (Rs.15,000 cr), said multiple people aware of the development.

JPMorgan is understood to be running a formal process to find a buyer.

In 2019, Baring PE Asia outbid top funds Blackstone, KKR, CVC Capital and Bain Capital to acquire CitiusTech for $1 billion (Rs7,500 cr) and a successful deal will help it more than double the money in less than three years.

CitiusTech, founded by IIT-Bombay graduates Koita and Jagdish Moorjani in 2005, provides healthcare technology services and solutions. Koita was the founder and CEO of Transworks BPO, which was sold to the Aditya Birla Birla Group in 2003. He set up Citius-Tech in 2005 with fellow IIT batchmate Moorjani.

The private equity firm had acquired about 80% of CitiusTech, from existing investors including General Atlantic. CitiusTech had raised $111 million in 2014 from General Atlantic by selling about 32% stake. BPEA acquired the remaining stake from the founders. Founders and employees still own 20% stake.

CitiusTech provides healthcare technology services, solutions and platforms to more than 130 organizations across the payer, provider, medical technology and life sciences markets. With more than 5,000 technology professionals worldwide, CitiusTech focuses on healthcare interoperability & data management, connected health, virtual care coordination & delivery, personalized medicine and population health management.

Its clients include US-based Geisinger Health, DaVita and Centra Health.

In October, CitiusTech had hired Bhaskar Sambasivan as its chief executive officer, replacing co-founder Rizwan Koita. Last year, CitiusTech had acquired SDLC Partners, a payer-focused technology solutions company, in Pittsburgh.

Healthcare technology deals were on the high in 2021 thanks to an increased focus on IT and enabled services amid the pandemic. Last year, Baring Asia acquired a controlling stake in the healthcare BPO unit of Hinduja Global Solutions for around $1 billion. Carlyle Group acquired Hexaware from Baring while Blackstone consolidated its position with a $2.8-billion Mphasis bet.

PE deal activity surged to an all-time high in 2021, with technology dominating the deal activity, attracting investments to the tune of $40 billion, PwC said in a note in February. Meanwhile, more than 10 technology-driven startups raised in excess of $7.36 billion in 2021 from the public markets through their IPOs, setting the base for Indian unicorns to tap capital markets.