The third-party provider of administration services for medical insurers shares of MediAssist shot up to an all-time high. The stock shot up more than 13.75 per cent on the National Stock Exchange.
The stock opened at Rs 620.00 per share on the national stock exchange, also touching the day-high level at Rs 639.00 per share, as well as recording a new life-time high level of Rs 639.00 per share on the Indian exchange.
Reasons behind the rally
Medi Assist notified the exchanges after market hours on Monday that it will fully acquire Paramount Health Services & Insurance TPA in a deal estimated to be worth over Rs 400 crore.
Mumbai-based Paramount Health Services & Insurance TPA will be acquired by Medi Assist Insurance TPA, a wholly-owned subsidiary of Medi Assist Healthcare Services, through an agreement signed by Fairfax Asia and Nayan Shah & family.
The Shah family and Fairfax Asia own Paramount, a significant player in the TPA market.
Estimated growth
According to the company, Medi Assist TPA will see a growth in market share to 36.6 percent in the group segment and 23.6 per cent in the health insurance industry following the acquisition of Paramount TPA, based on managed premiums.
The agreement was reached at an enterprise value of approximately Rs 311 crore, and it also stated that approximately Rs 110 crore in cash equivalents would be paid as part of the acquisition.
Among biggest TPA deals in insurance space
It further stated that, pending regulatory (Irdai) approvals, the acquisition represents one of the biggest TPA deals in India.
In addition to over 3,000 retail policyholders and 30 insurers, Paramount TPA serves group customers as well.
This calculated action bolsters our position as industry leaders and is consistent with our long-term goal of facilitating easy access to high-quality healthcare. “I’m excited to have the Paramount team join the Medi Assist family and help us reach even bigger goals,” said Satish Gidugu, CEO, Medi Assist.
