KUHN CAPITAL Tuesday, March 20, 2018
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A Telling Deal

July 8

Perot Systems’ recent acquisition of Vision Healthsource India based in Chennai, India, along with its US-based marketing operation Vision Healthsource Inc., is a small but telling deal in the manueverings between India and American based business process outsourcers (BPO’s). Vision provided billing and claims services for about 25 US physicians groups, handling about 25 million transactions and 670,000 phone calls per year. The deal looks richly priced: $3 million in cash and an additional $7 million contingent on future performance in exchange for a company with sales of about $2.5 million.

What we liked was the well-articulated rationale of the sellers CEO: "We realized that pure offshore Indian BPO companies have no future," said Anurag Jain. "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."

This observation has been driving a number of transactions between American and Indian BPO’s. Analysts speculate that Perot's decision to buy Vision was prompted at least in part by the need to move more quickly than developing its own Indian-based BPO subsidiary would have permitted.

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