The MphasiS BFL Group has entered into a definitive agreement to acquire Eldorado Computing, a US based healthcare benefits management solutions firm, for US$ 16.5 million in an all cash deal.
The deal also allows for a performance based incentive for Eldorado’s top management over the next three years. The transaction is expected to be immediately EPS accretive.
Eldorado Computing, Inc., a profitable entity with revenues of over $10 million, specializes in claims processing and benefit management solutions for the health insurance industry. Eldorado’s customers include third party administrators, HMOs, insurance companies, self-funded employers, preferred provider organizations, associations, managed care organizations and unions. With 128 clients representing 2.5 million members, the Company is a leader in technology administration solutions for healthcare payers. Its core business products and services include software solutions for health benefit management offered on a licensed basis or on an Application Service Provider platform. This solution streamlines the administrative costs and the technology required to command the processes of claims, billing, administration, case management, workflow, online enrollment and customer service.
Beginning with its first system release in 1984, Eldorado Computing Inc. has enjoyed steady growth and achieved widespread acceptance of its systems making it one of the industry’s dominant vendors. Recently Eldorado has started to package their platform with Business Process Outsourcing services in the claims administration space.
Commenting on the acquisition, Mr. Jerry Rao, Chairman & CEO, MphasiS BFL said, “This acquisition is part of MphasiS’ overall business strategy to strengthen our footprint in the US and to enter the healthcare insurance and payment market. The deal is a perfect strategic fit for MphasiS as it provides a well-established software platform and marquis healthcare customer base. This is the foundation on which the combined entity will offer a complete portfolio of services to automate and outsource the processes related to healthcare benefits management. This is a high growth area and with Eldorado’s world class platform we will be able to become a business service provider, in addition to being an application service provider. The acquisition will position MphasiS as a first mover in integrating a global sourcing back-end to a platform-based software offering”.
Mr. Zane Bell, CEO, Eldorado Computing Inc., said, “We are strongly committed to growing Eldorado’s business and look forward to working closely with MphasiS’ world class BPO and IT Services teams. By utilizing MphasiS’ global delivery capabilities we will be able to offer our services to a broader range of customers in the US and will be in a better position to service their needs as both a leading IT platform as well as BPO services company.”
The transaction is expected to be completed in the quarter ending 31 March 2005.
Murdok | Breaking eBusiness News
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