Mumbai: Inventurus Knowledge Solutions (IKS), a healthcare technology solutions company backed by the family of the late Rakesh Jhunjhunwala, is in advanced negotiations to acquire Nasdaq-listed TruBridge in the US for around $600 million, said people aware of the matter.
If the deal takes place, this will be the company’s largest purchase and will help consolidate its presence in the healthcare solutions and revenue cycle management (RCM) segment, the people said. The transaction is in line with heightened investor interest in the space, which has seen unprecedented consolidation in the past two years.
A formal announcement is expected in the coming days.
IKS Healthcare, which gave the Jhunjhunwala family a 530-fold return on their investment during its December 2024 listing, is held by three discretionary trusts of the promoter family – Nishtha, Aryavir and Aryaman – with each owning 16.37% of the company.
Rekha Jhunjhunwala, Rakesh’s widow, owns another 0.23% stake while IKS founder Sachin Gupta holds 33.57%. The promoter group owns a total 63.7% of the company, which seeks to simplify the administrative tasks of physicians and medical assistants.
The company, founded originally as an RCM service provider in 2006, works with US providers.
In Talks for Funds
It manages their tasks as part of the overall care management process. These cover various customer touchpoints, ranging from scheduling to denial management. IKS added transcription service capabilities after its $200 million acquisition of Aquity Solutions in October 2023. This also brought in many client relationships, some of which can be scaled in the medium term.
IKS is negotiating for $675 million in financing with Citi, Deutsche Bank and JP Morgan to back its all-cash offer as well as help refinance the target’s debt, said the people cited.
TruBridge also provides healthcare information technology and services to community hospitals and healthcare organisations. Fourth quarter earnings missed revenue expectations by a slight margin. Last month’s earnings announcement amid ongoing strategic reviews and efforts to strengthen financial controls. Revenue for the 12 months ended December rose to $346.8 million from $342.2 million in the year before. It swung to a profit of $4.4 million from a nloss of $20.9 million.
US brokerage and financial services firm Cantor Fitzgerald reiterated its overweight ratings on the company last week, expressing confidence in TruBridge’s turnaround efforts. The company is said to be one to two quarters away from smoother quarterly bookings updates, which could improve visibility for investors. Despite the revenue miss, TruBridge’s quarterly results were in line on revenue and favourable on ebitda, according to analysts. A recent filing delay was deemed immaterial and aligns with the company’s efforts to improve reporting.
These developments reflect a mix of cautious optimism and strategic reassessment among analysts and investors. Its stock is down 18.53% year to date with a market value of $270 million as per Friday closing. In comparison, IKS Health current market capitalisation stood at Rs 26, 417.1 crore ($2.84 billion) on NSE.
IKS CFO Nithya Balakrishnan didn’t respond to queries and neither did TrueBridge.
The increasing complexity of healthcare billing and reimbursement regulations, growing focus on improving patient experience and the need for efficient and cost-effective revenue cycle management processes, are some of the key factors that are driving the healthcare revenue cycle management market, possibly driving premium valuations.
“IKS is using AI to break the linearity between revenue growth and employee growth as revenue increased 18.3% year on year while headcount growth was 1.5% year on year in the third quarter of FY26,” said Nomura analyst Abhisekh Bhandari. “The improvement in margins from this non-linearity is likely to be offset by increased investments in R&D.”
Annual R&D investments would be around 5% of sales. The focus of the company is to leverage the entire platform offering and compete with multiple point solutions that are being used by physicians.
The outsourced market for the US healthcare industry is growing at 12% annually, and a growth rate above 12% implies market share gains for IKS. In recent interactions, the company’s management have mentioned that even though the US healthcare industry is facing inflation, and reimbursements from the government and private companies are decreasing, it will act as a tailwind for IKS as providers face pressure on margins forcing them to lower operating costs by utilising the services of companies like IKS.
Capital allocation in the near term will focus on business growth, including inorganic opportunities and reducing the remaining $50 million debt.
“The market is right for consolidation and IKS remains open to evaluate assets across India and US which are inefficiently run and can aid in generating synergies,” said Kanwaljeet Saluja of Kotak Institutional Equities. “The balance sheet can support scaled acquisitions. Cost synergies would be from general and administrative expenses optimization. IKS is evaluating assets across RCM offerings as well as those with complementary clients such as acute settings, which offer better cross-selling for IKS’s large presence among ambulatory clients.”
Last year Blackstone acquired AGS Health for $1.1 billion in a closely contested race. Ontario Teachers’ Pension Plan scalped a 45% stake of Omega Healthcare valuing it at $1.8 billion while TA Associates invested $250 million for a majority buyout of Vee Healthtek. EQT Partners acquired GeBBS Healthcare Solutions from ChrysCapital for $860 million and Carlyle picked up a majority stake in Florida based Knack Global at a valuation of around $500 million.
