Patni Computer Systems acquires Universal American Corp. subsidiary

Indian IT and BPO service vendor Patni Computer Systems has said that it has signed a contract with the US-based health insurance firm Universal American Corp. to acquire its totally owned subsidiary CHCS Services. In addition, the Indian BPO firm has also won a five-year multi-million dollar deal to offer back-to-back policy administration facilities to the US insurance company.

A report published in a business website reports that while Patni Computer Systems refused to divulge the worth of these two deals with its existing client Universal American Corp., industry experts estimate the five-year contract to be worth approximately $250 million. A news release issued by the BPO firm said that acquiring CHCS Services would enable the company to expand its footprint in Pensacola in Florida and set up a new business line as a third party administrator in the healthcare and insurance sectors.

According to Patni Computer Systems CEO Jeya Kumar, the acquisition of CHCS Services is the biggest ever success in the history of the BPO firm and it would help the company in expanding its healthcare and life insurance business globally, while launching Patni as a third party administrator (TPA). Kumar said that Patni Computer Systems intends to augment its onshore delivery aptitude in North America, where it already has centers in Illinois, Bloomington and El Paso in Texas. Besides, the Indian BPO firm has recently established a near shore hub in Mexico.

Meanwhile, another business website says that Patni Computer Systems is currently assessing the possibilities of acquiring two or three firms in Europe and the Asia Pacific region. Confirming this report, Patni Computer Systems CFO Surjeet Singh told a news agency that while they evaluated two firms for acquisition in 2009, but gave up the move, presently they were assessing the possibilities to acquire two or three firms with a view to fill their portfolio space and also to spread out their geographical reach.

According to Singh, they were looking at acquiring firms having revenues anything between $75 million and $250 million. Singh further added that Patni Computer Systems presently has around $500 million in cash that would be utilized to fund the acquisitions.