Medi Assist to acquire Paramount Health Services for ₹400 cr; stock surges 14%

Medi Assist Healthcare Services, a health-tech and insurance-tech company, has signed a deal to acquire Paramount Health Services & Insurance TPA in a deal worth over ₹400 crore. The acquisition will be carried out by Medi Assist Insurance TPA, a wholly-owned subsidiary of Medi Assist Healthcare Services, according to the health-tech company’s statement in a BSE release on Monday.

Following this announcement, shares of Medi Assist opened higher ₹615.00 against the previous closing price of ₹561.10 on the BSE. In the early trade, the insurance-tech company surged by 13.8% to hit a high of ₹638.50. However, it soon lost momentum and fell as much as 8.72% from day’s high level, dropping to ₹610.00.

At the time of reporting, Medi Assist shares were trading 8.47% higher at ₹608.65 apiece, with the market cap standing at ₹4,279.73 crore. The company’s shares touched a 52-week high of ₹683.55 on August 1, 2024, and a 52-week low of ₹430.15 on January 25, 2024. The stock has gained 5.94% over the past month, jumped 18.40% in the past six months, and surged 31.61% year-to-date (YTD).

This acquisition, which is claimed to be amongst the largest TPA deals in India, is subject to regulatory approvals from the Insurance Regulatory and Development Authority of India (Irdai). The company has reached an agreement with Fairfax Asia and the Nayan Shah family, the owners of Mumbai-based Paramount Health Services & Insurance TPA, the release states.

Nayan Shah, MD at Paramount TPA states, "Paramount TPAs 28-years of leadership in the TPA industry stands testament to its success. The coming together of 2 leading TPAs will go a long way in delivering on the promise of Insurance for all by 2047."

As per the company, Medi Assist will see its market share leap to 36.6% in the group segment and 23.6% of the health insurance industry, by premiums managed, following the acquisition of Paramount TPA. Paramount TPA, currently, partners with 30 insurers and serves over 3,000 group customers and retail policyholders, it adds.

“This acquisition is expected, amongst others, to leverage Medi Assist’s technology, automation (AI/ML), provider networks that position the combined business as a long-term strategic partner to Insurers (General, SAHI and Life),” the release states.

The deal was finalised at an enterprise value of approximately ₹311 crore, with an additional ₹110 crore to be paid in cash equivalents as part of the acquisition.

Highlighting the accessibility of quality healthcare, Medi Assist CEO Satish Gidugu states, "This strategic move strengthens our market leadership and aligns with our long-term vision of making quality healthcare accessible and efficient. I welcome the Paramount team to the Medi Assist family and to achieving greater milestones."

Recently, the health-tech company reported a consolidated net profit rose by 5.9% to ₹18.82 crore in Q1 FY25, up from ₹17.77 crore in Q1 FY24. Net sales surged by 19.1% year-on-year (YoY) to ₹167.71 crore for the quarter.