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Technology Newsletter
March 2019
Technology Newsletter – March 2019

Contents
From the Team
Hello Readers,
03 Cover Story – Rise of RCM Outsourcing It gives us immense pleasure to welcome you to the latest
edition of our IT Services and Technology Newsletter.
In this Newsletter we have deep-dived into the RCM space,

09 Market News
covering the rise of RCM Outsourcing, key trends driving the
industry and key players in the market. We have also looked at
some of the recent transactions in the space.
10 Key Technology Transactions

We have covered in detail, key transactions of the month in the
tech space: Baring’s acquisition of AGS Health, a RCM service
provider.
12 Listed Market Multiples
We have also discussed the M&A and PE transactions in the
month of March along with an overall market analysis to bring
you deeper insights into the industry.
19 o3 Capital Overview
Hope you enjoy reading the Newsletter.
Technology Newsletter – March 2019 2

Cover Story Market News Key Transactions Market Multiples o3 Capital Overview
Overview of RCM Services
The entire healthcare revenue cycle process includes everything from determining patient eligibility, collecting their
co-pay, coding claims correctly, tracking claims, collecting payments and following up on denied claims
Front-end Services Middle Services
 Scheduling  Insurance verification  Transcription  Clinical documentation

 Pre–registration  Pre–authorization Pre- Patient  Coding  Release of information
formalities 1
Revenue 2 Doctor
 Registration  Financial counselling
with Patients Cycle  Case coordination  Medical records
Interaction
 Eligibility  Admissions Process  Records storage  Charge capture
3
Post Service
Functions
Back-end Services
 Billing  Reimbursement management

 Collection management  Underpayments
 Claim follow–up  Denial management
 Analytics  Contract compliance
Catered to by Offshore RCM service providers
Offshore RCM service providers are mostly active in the Post Service Functions segment such as A/R and Collection process
management whereas Onshore Service Providers operate mainly on Pre-formalities and some Post Service functions

RCM Outsourcing Market: A USD 29 Bn Market Opportunity
The USD 13 Bn RCM Outsourcing services market represents a significant opportunity with 12% anticipated CAGR growth
Market Forces Accelerating RCM Outsourcing
Economic Viability Health Reforms

 Narrow margin high volume  Value-based healthcare -
business due to declining qualitative based payments
Medicare reimbursements for providers
Global Healthcare RCM Outsourcing Market (in USD bn)  Rising bad debt & billing  Medicaid expansion leading
errors to wider patient base
1.2x Growth  Rising admin costs
29
Increased Compliance Patient Requirements
Requirement  Need for better patient
13  Shift from ICD-9 to ICD-10 care
 RAC Audits  Increasing importance of
 Complex coding Cyber Security in healthcare
requirements  Trend towards Self-pay
2018 2025
increasing complexities
 The global healthcare RCM outsourcing market was valued
at USD 13.2 Bn in 2018 and is expected to reach USD 29.0 Resource Limitation Ready Outsourcing Market
Bn by 2025, growing at a CAGR of 12%
 Capital constraints  Successful history of F&A
 Services such as coding, AR management, collections outsourcing
 Resource focus on core
management are expected to drive growth
business processes  Availability of skilled and
trained resources
Source: Reuters, Technavio, Mordor Intelligence

Key Players in the Market
There are a large number of both India & US based RCM service providers catering to the high growth market
India Based US Based
Note: List is illustrative, not exhaustive

Trends Impacting the RCM Services Market
The industry is moving towards consolidation as emerging technologies are revolutionizing the space, warranting RCM
providers to acquire all round & new age capabilities organically or inorganically
Cloud-based Systems Popularity of Analytics Virtual Medical Care Electronic Health Records
By 2019, digital healthcare
Cloud is revolutionizing RCM Convenience & savings (time &
data is expected to cross With increasing EHR adoption,
outsourcing as it enables RCM cost) are driving the industry
30,000 petabytes. Healthcare the industry is moving towards
providers to rapidly scale up by towards virtual care. It poses
providers are outsourcing the handful of RCM service
facilitating efficient challenges for RCM providers
predictive analytics to RCM providers who can offer EHR
communication between due to increased complexity of
providers to gain actionable implementation services
distant RCM facilities service delivery & payments
insights
Automation Value-based Healthcare Blockchain Data Security Concerns

Rapid adoption of automation Industry moving towards value Gaining popularity as 4.4 mn patient records were
would majorly impact front end based healthcare – providers healthcare data is critical & compromised only in US in 3rd
services like scheduling and are reimbursed based on data secrecy is of prime qtr of 2018, warranting greater
patient engagement. qualitative & quantitative importance. Service providers need for data security. RCM
Outsourced processes (coding, measures, requiring them to are imbibing blockchain service providers need to
collections management) would focus more on patient care and technologies to ensure data increase focus on cybersecurity
not be greatly impacted outsource RCM functions safety for clients
Consolidation in the Space

____
Capability acquisition by existing RCM Vendor consolidation by healthcare Acquisitions by PE/IT services players
service providers providers for single vendor mgmt. to ride the growth wave

Recent Transactions in the Space
The RCM and RCM Outsourcing space has witnessed significant interest and action from both PEs and Strategic players
Target Acquirer Target Description Transaction Type Deal Value
India based RCM services provider with 5,000 employees PE 320
US based provider of RCM and Health Information Management

PE 142
services
Noida based Medical Billing and Coding services provider M&A 17
US based Healthcare Staffing services and Coding services

M&A 197
provider
US based provider of RCM, practice management and data

M&A 460
analytics services
India based company engaged in Risk Adjustment Medical

PE 70
Coding (RAMC) business
India based RCM services provider with 5,000 employees PE NA
US based healthcare services outsourcing company M&A NA
Source: MergerMarket, o3 Research, Company filings

Note: List is illustrative, not exhaustive

Baring PE Acquires AGS Health
Significant Interest in RCM Outsourcing Space
 AGS received good interest from multiple funds with

Baring emerging as the preferred bidder
Acquired
Asia based PE firm investing in India based RCM services RCM space witnessing significant interest from PE
healthcare, logistics, media, provider with 5,000
 The acquisition follows the recent acquisition of
education, FS and retail employees
GeBBS Healthcare (Dec 2018), a competitor of AGS,
sectors
by ChrysCapital in a ~USD 150 mn deal
 Earlier, in Nov 2017, The Carlyle Group bought
majority stake in VisionaryRCM
Deal Rationale
Deal Numbers
 Experienced management team of AGS. AGS is founded by
Devendra Saharia, who was the co-founder of MiraMed Ajuba, a
global healthcare BPO services company
320 Exit for Existing Investors
 AGS Health manages USD 35 bn in receivables annually and is one
of the leading scaled up RCM companies based out of India  The transaction provides a good exit for Altaris
Deal Value
(USD mn) Capital & WindRose Health Investors, within 2 years
 AGS has 5,000+ skilled resources & expertise across the entire of their acquisition of AGS Health in Sep 2017
gamut of RCM services including medical billing, claim
submission, denial management & medical coding
2017 2019
 High demand for RCM service providers due to rising outsourced
AGS acquired by Altaris AGS acquired by
opportunities in niche health IT and RCM space as a result of
Capital & WindRose Health Baring PE
technological advancements, expanding insurance coverage,
rising population & regulatory complexities
Source: MergerMarket, Industry reports

News Snippets
RPA spend to reach over USD 2 billion in 2022: Gartner
Gartner estimates that global spending on robotic process

automation (RPA) software will total USD 2.4 billion in 2022, up
from USD 680 million in 2018. It predicts that by the end of 2022,
AI Will Eliminate 80% Of Project Management Tasks By
85% of large organizations will have deployed some form of RPA
2030: Gartner
Artificial intelligence (AI) will take on traditional Project

Management functions such as data collection, tracking and
India tech market to grow 8% in 2019: Forrester reporting, according to Gartner
India is the fastest-growing country for tech spending in Asia

Pacific. Tech spending in India is projected to increase by 8% in
Forrester: Digital marketing spend to reach USD 146
2019 and 7% in 2020, according to global market research
billion by 2023, but search landscape is changing
firm Forrester
Digital marketing spend will reach USD 146 billion by 2023,
growing at a 9% CAGR, according to a Forrester report. However,
search ad budgets are predicted to shift to voice; and voice-
activated assistants like Amazon's Alexa and Google Assistant will
Tech Mahindra reskilled nearly 70% of IT Workforce in be mainstream in 5 years.
Digital and Future Skills
As part of its TechMNxt charter, Tech Mahindra is investing heavily in
reskilling its employees in digital and next generation technologies Accenture acquires innovation firm to boost incubation
like Blockchain and Artificial Intelligence (AI) offer
Accenture has added innovation business “What If” to offer clients

an incubation service, based on an iterative testing model that
allows companies to incubate new products, services, business
models and organizational structures within the bounds of
structured experimentation

Key M&A Deals in the Month

EV/
Target Acquirer Target Description EV Revenue
India based IT services player 2,325* 2.9x*
Cloud-based integration and automation company 53 NA
IT Analytics platform NA NA
Solutions for investment banks & asset management companies NA NA
Digital consulting firm specializing in customer experience strategy,

42 0.9x
business transformation and change management
Provides service that aims to help enterprises plan their strategic

166 NA
projects and work streams
Pure play cyber security company NA NA
Dutch digital marketing agency NA NA
Data, voice & cloud solutions NA NA
Source: MergerMarket, o3 Research. Note: Deal value figures in USD mn

EV/ Revenues are calculated based on LTM Revenue as on 31st Mar, 2018 for Mindtree & 31st Dec, 2018 for StoneBridge
* Note: Deal under process, subject to regulatory approvals. Multiples are based on current consideration offered by L&T under open offer

Key Private Equity / Funding Deals in the Month
Target Acquirer Target Description Deal Value
RPA software company NA
Predictive data and analytics for climate risk 23
IoT Cybersecurity platform 15
AI-based solutions developer for the insurance industry 60
Cloud API integration platform that enables developers to publish,

25
integrate and manage all of their APIs through a unified platform
Medical RCM services company providing medical billing, medical

320
coding and business analytics services to healthcare providers
US based enterprise revenue ops platform provider 28
Industrial IoT, ICS & OT security platform 18
Advanced clinical data and analytics company 40
Source: MergerMarket, o3 Research. Note: Deal value figures in USD mn

Listed Market Multiples — Segment Snapshot
EV / Revenue EV / EBITDA 3 Yr CAGR EBITDA Margin

Large Cap IT 2.3x 11.6x
9.0% 19.4%
Services 2.1x 9.8x
Diversified
Mid Cap IT 2.0x 13.0x

10.2% 15.6%
IT
Services 1.7x 11.0x
Small Cap IT 0.7x 5.1x

5.0% 14.3%
Services 0.6x 4.5x
Software 4.6x 26.5x

26.3% 15.3%
Development 3.7x 20.7x
Engineering
Product
Engineering 1.2x 11.2x

14.1% 10.1%
Services 1.1x 8.5x
1.4x 7.6x
Testing 9.9% 17.9%
1.2x 6.5x
2.3x 14.7x
BPO/Non-Voice 6.8% 13.4%
BPO / KPO
2.1x 12.2x
BPO/Voice 0.7x 7.1x

9.3% 10.2%
0.7x 6.3x
Staff-
0.3x 7.1x
ing
Staffing 3.6% 4.4%

0.3x 7.1x
5.1x 17.4x
Large Software 5.9% 30.4%
4.6x 12.3x
Software
SaaS 13.9x NM
36.0% (6.7%)
10.8x NM
BI & Analytics 6.1x 32.5x

11.9% 0.5%
5.2x 13.1x
LTM NTM
Source: S&P Capital IQ

All multiples are based as on 31st Mar, 2019

Listed Market Multiples — Diversified IT Services
Large Cap IT Services

Revenue EBITDA 3-Yr CAGR EBITDA LTM NTM
Name Mkt Cap EV
(LTM) (LTM) (%) Margin (%) EV/EBITDA EV/Revenue P/E EV/EBITDA EV/Revenue P/E
IBM 125,560 159,580 79,591 16,710 (1%) 21% 9.5x 2.0x 14.8x 8.6x 2.0x 10.1x
Accenture 112,271 108,219 40,840 6,676 9% 16% 16.2x 2.6x 25.6x 14.4x 2.4x 23.6x
TCS 108,407 101,942 20,191 5,474 10% 27% 18.5x 5.0x 25.2x 17.2x 4.5x 22.8x
Infosys 46,567 42,794 11,545 3,014 8% 26% 14.1x 3.7x 21.4x 13.6x 3.4x 19.8x
Cognizant 41,666 37,900 16,125 3,320 9% 21% 11.4x 2.4x 20.1x 10.1x 2.2x 16.3x
Wipro 22,082 18,476 8,239 1,501 5% 18% 12.3x 2.2x 18.4x 10.3x 2.1x 16.1x
HCL 21,287 21,010 8,393 1,949 11% 23% 10.7x 2.5x 15.2x 9.4x 2.2x 14.5x
Capgemini 19,502 22,214 15,110 1,917 3% 13% 11.8x 1.5x 25.4x 9.6x 1.4x 16.9x
NTT Data 15,454 19,276 19,428 2,956 10% 15% 6.6x 1.0x 21.0x 6.5x 1.0x 18.6x
Tech Mahindra 9,933 8,878 4,871 866 9% 18% 10.3x 1.8x 15.8x 9.3x 1.7x 14.8x
Mean 7% 20% 12.1x 2.5x 20.3x 10.9x 2.3x 17.4x
Median 9% 19% 11.6x 2.3x 20.5x 9.8x 2.1x 16.6x
Mid Cap IT Services

Name Mkt Cap EV
Mphasis 2,658 2,492 1,070 186 8% 17% 13.4x 2.3x 18.2x 11.5x 2.1x 16.2x
L&T Infotech 2,360 2,298 697 122 14% 17% 18.7x 3.3x 22.5x 15.1x 2.8x 21.1x
MindTree 2,239 2,098 955 146 16% 15% 14.3x 2.2x 21.1x 12.4x 2.1x 20.9x
Hexaware 1,484 1,366 668 104 14% 16% 13.0x 2.0x 17.9x 11.0x 1.7x 16.0x
NIIT Tech 1,182 1,066 502 84 10% 17% 12.7x 2.1x 22.0x 10.3x 1.8x 18.0x
Perficient 909 984 498 60 3% 12% 16.4x 2.0x 37.5x 11.8x 1.9x 16.1x
Persistent 723 560 472 78 16% 17% 7.2x 1.2x 14.9x 6.0x 1.1x 12.4x
Zensar 753 693 535 62 9% 12% 11.1x 1.3x 17.4x 8.5x 1.1x 14.8x
GFT 224 319 478 41 5% 9% 8.1x 0.7x 9.5x 7.9x 0.7x 12.0x
Mean 10% 15% 12.8x 1.9x 22.6x 11.8x 1.9x 18.4x
Median 10% 16% 13.0x 2.0x 17.9x 11.0x 1.7x 16.0x

All figures are in USD mn, wherever applicable

Listed Market Multiples — Diversified IT Services
Small Cap IT Services

Name Mkt Cap EV
Mastek 153 110 142 20 74%* 14% 5.4x 0.8x 12.0x 5.1x 0.6x 10.0x
R Systems 112 81 101 8 5% 8% 10.6x 0.8x 12.2x NM NM NM
Datamatics 88 75 153 14 10% 10% 5.1x 0.5x 10.2x 3.9x 0.5x 7.8x
Kellton Tech 56 60 121 19 40% 15% 3.2x 0.5x 5.2x NM NM NM
Aurion Pro 44 46 69 14 (13%) 21% 3.2x 0.7x 6.1x NM NM NM
Mean 1% 14% 5.5x 0.6x 9.1x 4.5x 0.6x 8.9x
Median 5% 14% 5.1x 0.7x 10.2x 4.5x 0.6x 8.9x

* The company did an acquisition

Listed Market Multiples — Product Engineering
Software Development
Name Mkt Cap EV
EPAM 9,163 8,418 1,843 283 26% 15% 29.8x 4.6x 39.9x 21.1x 3.7x 33.2x
Globant 2,598 2,512 522 95 27% 18% 26.5x 4.8x 50.6x 20.7x 3.9x 33.0x
Luxoft 1,989 1,888 904 95 13% 11% 19.8x 2.1x 48.1x 13.7x 1.9x 20.9x
Mean 22% 15% 25.4x 3.8x 46.2x 18.5x 3.2x 29.0x
Median 26% 15% 26.5x 4.6x 48.1x 20.7x 3.7x 33.0x
Engineering Services
Name Mkt Cap EV
Alten 3,572 3,564 2,599 267 14% 10% 13.1x 1.4x 0.0x 11.9x 1.3x 17.6x
Altran 2,786 4,233 3,339 448 14% 13% 9.6x 1.3x 0.0x 7.3x 1.2x 10.8x
Akka 1,338 1,651 1,724 144 15% 8% 11.6x 1.0x 23.8x 8.7x 0.8x 13.4x
Cyient 1,034 865 649 79 15% 12% 10.9x 1.3x 17.4x 8.2x 1.2x 14.7x
Bertrandt 695 557 1,184 117 3% 10% 4.8x 0.5x 13.0x 4.0x 0.5x 10.6x
Assystem 547 582 508 35 5% 7% 20.9x 1.2x 25.3x 13.7x 1.1x 13.3x
Mean 11% 10% 11.8x 1.1x 13.3x 8.9x 1.0x 13.4x
Median 14% 10% 11.2x 1.2x 15.2x 8.5x 1.1x 13.3x
Testing Services
Name Mkt Cap EV
Cigniti 130 138 115 19 13% 17% 7.1x 1.2x 6.5x 5.5x 1.1x 6.4x
SQS India BFSI 78 66 42 8 6% 19% 8.2x 1.6x 14.6x 7.5x 1.3x NM
Mean 10% 18% 7.6x 1.4x 10.5x 6.5x 1.2x 6.4x
Median 10% 18% 7.6x 1.4x 10.5x 6.5x 1.2x 6.4x


Listed Market Multiples — BPO/KPO Services
Non-Voice
Name Mkt Cap EV
Genpact 6,665 7,602 3,001 450 7% 15% 16.9x 2.5x 24.3x 13.0x 2.3x 17.7x
Capita 2,675 3,490 4,994 345 (7%) 7% 9.9x 0.7x 7.0x 6.1x 0.7x 10.2x
WNS 2,662 2,602 801 136 13% 17% 19.1x 3.2x 28.1x 15.1x 3.1x 27.4x
EXL 2,060 2,065 883 118 12% 13% 17.5x 2.3x 37.0x 12.2x 2.1x 20.2x
eClerx 641 641 205 43 5% 21% 14.7x 3.1x 19.4x 12.2x 2.9x 16.8x
First Source 469 527 540 71 7% 13% 7.4x 1.0x 8.8x 6.7x 0.9x 8.2x
Mean 5% 14% 13.3x 1.9x 19.3x 10.1x 1.8x 14.6x
Median 7% 13% 14.7x 2.3x 19.4x 12.2x 2.1x 16.8x
Voice
Name Mkt Cap EV
Teleperformance 10,354 12,721 5,085 813 9% 16% 16.0x 2.6x 30.3x 12.6x 2.2x 19.6x
Sykes 1,206 1,179 1,626 166 8% 10% 7.1x 0.7x 24.4x 6.3x 0.7x 12.8x
Hinduja Global 208 172 647 46 13% 7% 3.7x 0.3x 8.6x 2.5x 0.2x 7.0x
Mean 10% 11% 8.9x 1.2x 21.1x 7.1x 1.1x 13.1x
Median 9% 10% 7.1x 0.7x 24.4x 6.3x 0.7x 12.8x


Listed Market Multiples — Staffing Services
Staffing Services
Name Mkt Cap EV
Randstad Holdings 8,933 10,383 27,264 1,239 7% 5% 8.5x 0.4x 11.5x 8.0x 0.4x 10.4x
Adecco 8,848 10,129 27,327 1,412 3% 5% 7.3x 0.4x 17.0x 7.7x 0.4x 11.0x
Manpower Group 4,965 5,522 21,991 918 4% 4% 6.0x 0.3x 9.7x 6.3x 0.3x 10.7x
Kelly Services 862 829 5,514 114 0% 2% 7.0x 0.2x 38.0x 6.5x 0.1x 9.4x
Mean 4% 4% 7.2x 0.3x 19.1x 7.1x 0.3x 10.4x
Median 4% 4% 7.1x 0.3x 14.3x 7.1x 0.3x 10.5x


Listed Market Multiples — Software
Large Software
Name Mkt Cap EV
Microsoft 904,861 862,671 118,459 49,581 10% 42% 17.4x 7.3x 27.4x 15.5x 6.6x 25.7x
Apple 895,667 923,970 261,612 79,523 4% 30% 11.6x 3.5x 15.7x 12.3x 3.6x 16.1x
Alphabet 816,907 711,779 136,819 40,421 22% 30% 17.6x 5.2x 26.9x 12.1x 4.4x 25.1x
Oracle 183,562 200,421 39,831 16,336 2% 41% 12.3x 5.0x 19.2x 10.8x 5.0x 14.5x
SAP 137,852 140,540 28,288 7,755 6% 27% 18.5x 5.1x 30.1x 13.5x 4.6x 21.5x
Mean 9% 34% 15.5x 5.2x 23.9x 12.8x 4.8x 20.6x
Median 6% 30% 17.4x 5.1x 26.9x 12.3x 4.6x 21.5x
SaaS
Name Mkt Cap EV
Salesforce.com 122,103 121,128 13,282 1,524 26% 11% NM 9.1x NM 30.1x 7.5x NM
ServiceNow 44,491 43,655 2,609 108 37% 4% NM 16.7x NM 46.9x 12.7x NM
Workday 42,813 42,239 2,822 (240) 35% (9%) NM 15.0x NM 62.4x 11.9x NM
Shopify 22,968 20,989 1,073 (69) 74% (6%) NM 19.6x NM NM 14.1x NM
Zendesk 9,211 9,242 599 (104) 42% (17%) NM 15.4x NM 162.9x 11.5x NM
RingCentral 8,758 8,558 674 9 32% 1% NM 12.7x NM 79.9x 10.0x NM
HubSpot 6,843 6,570 513 (35) 41% (7%) NM 12.8x NM 83.6x 10.1x NM
Box 2,787 2,682 608 (88) 26% (14%) NM 4.4x NM 57.6x 3.8x NM
Mean 39% (5%) NM 13.2x NM 74.8x 10.2x NM
Median 36% (7%) NM 13.9x NM 62.4x 10.8x NM
BI & Analytics
Name Mkt Cap EV
Splunk 18,699 17,639 1,803 (193) 39% (11%) NM 9.8x NM NM 7.9x NM
Tableau Software 10,957 9,935 1,155 (54) 21% (5%) NM 8.6x NM NM 7.3x NM
Teradata 5,135 4,964 2,164 123 (5%) 6% 40.4x 2.3x NM 13.1x 2.4x NM
Verint Systems 3,911 4,307 1,230 175 3% 14% 24.6x 3.5x NM 13.0x 3.1x NM
Mean 14% 1% 32.5x 6.0x NM 13.1x 5.2x NM
Median 12% 1% 32.5x 6.1x NM 13.1x 5.2x NM

All multiples are based as on 31st Mar, 2019. All figures are in USD mn, wherever applicable
Note: We have not calculated EBITDA multiples for SaaS players due to lack of companies with positive EBITDA

o3 Capital — Overview
o3 Capital - Global Reach
Mumbai
Bangalore Singapore
Transactions # of Cross Border Total Transaction

150 Closed 37 Transactions 37 Advisors
Recent Transactions
z z z z z z z z
Exclusive
financial advisor
to XSEED
NTT Data Tanla Solutions QuEST Global American Pricol Rangsons NeST Software
Education and
acquired acquired acquired CyberSystems Technologies Electronics was acquired
India 2020
Atom Karix Mobile Exilant acquired acquired by acquired by by QuEST
Limited on its
Technologies Technologies GGK Altran Cyient Global
fundraise from
Technologies Technologies
Verlinvest
Color denotes o3 Capital’s client

o3 Capital — Technology Team
Mumbai Office
901, Piramal Tower,

Peninsula Corporate Park,
G.K. Marg, Lower Parel
Mumbai – 400 013
Tel: +91 22 6111 5700
mumbai@o3capital.com Gautam Jaggi
gautam.jaggi@o3capital.com
Bangalore Office
Manish Poddar
o3 House, No. 5, Crescent Road,
High Grounds, manish.poddar@o3capital.com
Bangalore - 560 001
Tel: +91 80 4241 0000
bangalore@o3capital.com Karthik H
karthik.h@o3capital.com
Singapore Office
Animesh Khemka
23, Amoy Street,
animesh.khemka@o3capital.com
Singapore - 069858
Tel: +65 6595 9350
singapore@o3capital.com
www.o3capital.com

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Technology Newsletter

Technology Newsletter – March 2019

From the Team

In this Newsletter we have deep-dived into the RCM space,

10 Key Technology Transactions

Hope you enjoy reading the Newsletter.

Technology Newsletter – March 2019 2

Overview of RCM Services

Front-end Services Middle Services

 Scheduling  Insurance verification  Transcription  Clinical documentation

 Billing  Reimbursement management

Catered to by Offshore RCM service providers

Technology Newsletter – March 2019 3

RCM Outsourcing Market: A USD 29 Bn Market Opportunity

Market Forces Accelerating RCM Outsourcing

Economic Viability Health Reforms

Source: Reuters, Technavio, Mordor Intelligence

Technology Newsletter – March 2019 4

Key Players in the Market

India Based US Based

Note: List is illustrative, not exhaustive

Technology Newsletter – March 2019 5

Trends Impacting the RCM Services Market

Automation Value-based Healthcare Blockchain Data Security Concerns

Consolidation in the Space

Technology Newsletter – March 2019 6

Recent Transactions in the Space

Target Acquirer Target Description Transaction Type Deal Value

India based RCM services provider with 5,000 employees PE 320

US based provider of RCM and Health Information Management

Noida based Medical Billing and Coding services provider M&A 17

US based Healthcare Staffing services and Coding services

US based provider of RCM, practice management and data

India based company engaged in Risk Adjustment Medical

India based RCM services provider with 5,000 employees PE NA

US based healthcare services outsourcing company M&A NA

Source: MergerMarket, o3 Research, Company filings

Technology Newsletter – March 2019 7

Baring PE Acquires AGS Health

Significant Interest in RCM Outsourcing Space

 AGS received good interest from multiple funds with

Source: MergerMarket, Industry reports

Technology Newsletter – March 2019 8

RPA spend to reach over USD 2 billion in 2022: Gartner

Gartner estimates that global spending on robotic process

Artificial intelligence (AI) will take on traditional Project

India is the fastest-growing country for tech spending in Asia

Accenture has added innovation business “What If” to offer clients

Technology Newsletter – March 2019 9

Key M&A Deals in the Month

India based IT services player 2,325* 2.9x*

Cloud-based integration and automation company 53 NA

Solutions for investment banks & asset management companies NA NA

Digital consulting firm specializing in customer experience strategy,

Provides service that aims to help enterprises plan their strategic

Pure play cyber security company NA NA

Dutch digital marketing agency NA NA

Data, voice & cloud solutions NA NA

Source: MergerMarket, o3 Research. Note: Deal value figures in USD mn

Technology Newsletter – March 2019 10

Key Private Equity / Funding Deals in the Month

Target Acquirer Target Description Deal Value