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Medi Assist set to acquire 100% stake in Mumbai-based Medvantage Insurance TPA Pvt Ltd

Medi Assist, India’s leading health insurance third party administrator, is all set to acquire 100% stake in Mumbai-based Medvantage Insurance TPA Pvt Ltd, one of the oldest TPAs that manages marquee corporate clients like Microsoft and Wells Fargo.

The acquisition is thus expected to help Medi Assist consolidate its position in the corporate side of the TPA business.

Both the parties have last week signed a definitive agreement towards this merger and are now awaiting IRDA’s approval for the same, three people familiar with the matter said.

According to industry sources, the likely size of the deal is about Rs 35 crore. This cannot be confirmed by any of the merging partners.

It is however learnt that Medi Assist would fund this deal using its existing cash from its balance sheet.

The acquisition would help the largest TPA to raise its market share to 30% in the corporate side of business from 27%, Medi Assist’s chief executive Satish Gidugu told ET.

“Medvantage has over 100 high-quality corporate accounts which has prompted us to explore this acquisition,” Gidugu said. “We always explore inorganic growth and have more plans in the pipeline. The outlook to grow business across all segments – retail, corporate and government business – will drive our future strategy,” he said.

Earlier, it had acquired Dedicated Healthcare Services TPA in 2016 and Medicare TPA in 2018.

“As the industry evolves, scaling up any business becomes important. Given the size of our business, it is difficult to scale it up. That’s why we thought of a strategic fit for our existing stakeholders and Medi Assist fits this perfectly,” Medvantage chairman Nimish r Parekh told ET.

Founded in 2000, Medi Assist has built a pan-India network of hospitals, developed technologies to improve claims settlement cycle and deployed mobile applications to simplify policyholder access and experience.

In FY22, it earned a revenue of Rs 400 crore and managed a total premium of over Rs 11000 crore including Rs 9,500 crore of corporate premiums.

Medvantage earned Rs 30 crore revenue in the same year and managed corporate premiums of Rs 700 crore.

The merger would provide Medvantage customers access to Medi Assist’s cashless hospital network, OPD services and a slew of offerings like navigator (for out-of-pocket cost estimation, financing etc.) which are in the pipeline, the company said.

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