Perot Systems to acquire Vision Healthsource

Perot Systems is to acquire Vision Healthsource India Pvt Ltd. in Chennai, India, as well as its U.S.-based marketing operation, Vision Healthsource.

Vision, a provider of billing and claims technology for healthcare service providers in the U.S., has a client base of more than 25 healthcare billing companies in the U.S.

Vision’s approximately 500 employees will become a part of Perot Systems’ healthcare group, the company’s largest industry group, and the acquisition will result in an expansion of Perot Systems’ healthcare business process outsourcing (BPO) capabilities, Plano, Texas-based Perot said in a statement on Wednesday.

Once the acquisition is complete Vision will continue to operate as an independent company, with the current management continuing to run the company. Perot Systems has agreed to acquire Vision for $10 million — $3 million in cash at closing, and an additional $7 million if certain performance targets are met through 2006. For the 12 months ending December 2002, Vision had revenues of approximately $2.4 million.

“We realized that pure offshore Indian BPO companies have no future,” Anurag Jain, chief executive officer and founder of Vision Healthsource told IDG News Service. “You need to have an offshore, onshore, and near-shore presence to the customer. Also BPO companies have to be focused by vertical or processes, and offer end-to-end solutions.” Vision was operating primarily in the physicians segment, and did not have a presence in other segments of the healthcare industry like hospitals and healthcare insurance.

The proposed acquisition of Vision by Perot is the latest in a number of mergers and acquisitions in the Indian BPO industry, indicating that the industry is going through a consolidation.

Vision handles more than $1 billion in healthcare provider claims per year for physicians, physician specialties and hospital-based physicians across the U.S. The company’s claims processing and call centers in Chennai process more than 25 million transactions and 670,000 phone calls per year.

Perot already has a joint venture in India with HCL Technologies in Noida, near Delhi, in which both companies hold a 50 percent stake. HCL Perot Systems Ltd., also based in Noida, offers software services to clients worldwide.

Perot is the latest in a large number of multinational companies to set up BPO operations in India with an eye to tapping the low cost, skilled manpower in the country. Microsoft for example is running a pilot in Bangalore with the eventual objective of moving some key support functions to the city. While most multinationals have set up their own captive operations, Perot’s decision to acquire an existing operation may have been prompted by the need to cut down on the time and effort required to set up a wholly-owned BPO subsidiary, according to analysts.