The companies signed a definitive agreement for the merger last week and are now awaiting approval from the sector regulator. Insurance Regulatory and Development Authority (IRDA) for the same, said three people familiar with the matter.
Industry insiders said the likely size of the deal is around ₹35 crore. This could not be confirmed by any of the merging entities.
However, it is learned that Medi Assist will fund the deal using cash from its balance sheet.
Medi Assist Chief Executive Satish Gidugu said the acquisition will help the country’s largest TPA increase its market share in the corporate segment of the business from 27 per cent to 30 per cent.
“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 approach to growing business across all sectors – retail, corporate and government business – will drive our future strategy.” Medvantage (formerly known as) UnitedHealthcare Parekh Insurance TPA) generated revenue of ₹30 crore in 2021-22 and managed a corporate premium of ₹700 crore.
Medvantage chairman Nimish R Parekh told ET, “As the industry grows, it becomes imperative for any business to grow. “Given the size of our business, it is difficult to grow. So we thought of a strategic fit for our existing stakeholders, and Medi Assist fits in perfectly.”
The merger will provide MedVantage customers with a host of offerings such as MediAssist’s cashless hospital network, OPD services and Navigator (for out-of-pocket cost estimation, financing etc.) that are in the pipeline, the company said.
Medi Assist previously acquired Dedicated Healthcare Services TPA in 2016 medical TPA in 2018
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 FY22, it generated revenue of ₹400 crore and managed a total premium of over ₹11,000 crore including ₹9,500 crore corporate premium.