New Delhi: Among India''s top outsourced business services providers, Firstsource Solutions Ltd (formerly ICICI OneSource), has bought industry MedAssist Holding Inc, provider of revenue cycle management in the US healthcare, for $330 million in an all-cash deal.

Firstsource provides business process management services to global leaders in banking and financial services, telecom and media and healthcare and ranked among India''s top 5 BPO companies by NASSCOM for the year 2005-06.

The acquisition provides Firstsource an entry into the provider segment of the US healthcare BPO industry and presents significant synergies to Firstsource, which already has a strong presence in the US healthcare BPO segment in the "payor" or insurance company segment, will now also enter the ''provider'' or the hospitals end of healthcare BPO services.

Ananda Mukerji, managing director and CEO, Firstsource, said, "The healthcare space in the US is a tremendously attractive market from a BPO perspective. Firstsource already has a significant presence in the payor side of the market. This acquisition gives us access to the equally large provider side. MedAssist has an attractive portfolio of service offerings, an excellent customer base and a strong management team. We see significant opportunity to grow our business in the segment by cross-selling Firstsource''s services to MedAssist''s customers."

Firstsource entered the health-care outsourcing segment in 2005 with the acquisition of Chennai-based Rev IT Systems and its Michigan-based subsidiary Sherpa Business Solutions and earlier in January this year, it acquired US health-care claims outsourcer BPM for a reported $40 million.

In the insurance segment Firstsource provides processing services to US-based health insurers, and has been looking to expand its business by managing the administration, including cost management tasks, of US-based hospitals.

Income from services to healthcare clients represented 13.7 per cent of Firstsource''s revenues for quarter ended June 30, 2007.

According to the current estimates of the Centre for Medicare & Medical services, office of the Actuary and Congressional budget office, hospital care in the US amounts to approximately $700 billion and administrative costs are estimated to be 14 per cent, or $100 billion, which is a huge opportunity.

Revenue and cost pressure on healthcare providers is increasing. Therefore, providers are increasingly outsourcing multiple elements of their revenue cycle to increase revenues (by reducing uncompensated care) and contain cost. MedAssist''s capabilities provide Firstsource with a pan-American presence in this provider segment, consisting of over 5,000 hospitals nation-wide.

Michael Shea, president and CEO, MedAssist said, "Becoming part of the Firstsource family is a very positive step for our customers and employees. The entire MedAssist management team is excited about the synergies that we will be able to bring to our clients as we continue to introduce innovative solutions in a cost effective manner to the healthcare market. With Firstsource we will have tremendous financial strength and the opportunity to grow in both scale and reach that we would otherwise not be able to achieve both nationally and globally."

MedAssist Holding, Inc is a portfolio company of RoundTable Healthcare Partners, an operating-oriented private equity firm focused exclusively on the healthcare industry. RoundTable acquired a majority interest in MedAssist in May 2003. Following its original investment, RoundTable led and supported MedAssist''s strategic acquisitions of Argent Healthcare Financial Services, Inc. in 2004, as well as Twin Medical Transaction Services, Inc. and Capstone Solutions LLC in April 2006.

The sale of MedAssist marks the third major portfolio realization for RoundTable''s $400 million Fund I which closed in March 2002. Previously, Sabex Holdings Ltd. was sold in August 2004 to Sandoz for $565 million and American Medical Instruments Holdings, Inc. was sold to Angiotech Pharmaceuticals, Inc. for $785 million in February 2006. Additional realisations for Fund I investors have come from four portfolio company recapitalizations. Robert W. Baird & Co. and Kirkland & Ellis LLP advised MedAssist on this transaction.