Thus, the acquisition is expected to help Medi Assist consolidate its position in the corporate side of the TPA business.
Three people familiar with the matter said the two sides signed a definitive agreement for the merger last week and are now awaiting IRDA’s nod for the same.
According to industry sources, the likely size of the deal is around Rs 35 crore. This cannot be confirmed by any of the merger partners.
However it is learned that Medi Assist will fund the deal using existing cash from its balance sheet.
The acquisition will help the largest TPA increase its market share in the corporate sector from 27 per cent to 30 per cent, Satish Gidugu, chief executive of MediAssist, told ET.
“MedVantage has over 100 high-quality corporate accounts, which is what prompted us to explore this acquisition,” Gidugu said. “We always explore inorganic growth and have more plans in the pipeline. The potential for expanding business across all sectors of retail, corporate and government businesses will drive our future strategy.
Earlier it acquired Dedicated Healthcare Services TPA in 2016 and Medicare TPA in 2018.
“As the industry evolves, it becomes important to grow any business. Given the size of our business, it is difficult to grow it. So we thought of a strategic fit for our existing stakeholders and Medi Assist on this. Fits in perfectly,” Medvantage chairman Nimish R Parekh told ET.
Established in 2000, MediAssist has built a pan-India network of hospitals, developed technologies to improve the claim settlement cycle and deployed mobile applications to ease policyholder access and experience.
In FY 2012, it generated revenue of Rs 400 crore and managed a total premium of over Rs 11,000 crore, which included Rs 9,500 crore of corporate premium.
In the same year MedVantage generated revenue of Rs 30 crore and managed a corporate premium of Rs 700 crore.
The merger will provide MedVantage customers with a host of offerings like MediAssist’s cashless hospital network, OPD services and Navigator (out-of-pocket cost estimation, financing, etc.) which are in the pipeline, the company said.