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India giant Wipro's $460 million deal for HealthPlan Services spotlights area tech firms

 
Published Feb. 12, 2016

A major tech company in India just agreed to buy a Tampa health care IT firm for a healthy $460 million in a deal that shows Tampa Bay's rising technology market is very much on the global radar.

Bangalore-based Wipro said it will pay cash for Tampa's fast growing, 2,000-employee HealthPlan Services. The business offers technology platforms to health insurance companies, connecting them to over 40 public exchanges and over 150 private exchanges in the U.S.

"We are excited about what Wipro and HealthPlan Services can accomplish together for our customers and employees," said Jeff Bak, HealthPlan Services' chief executive officer.

The company was started in 1970 but grew rapidly in recent years as health care exchanges became more mainstream in the U.S. health care arena.

One of the firm's recent clients is the largest credit union in the state of Florida. Suncoast Credit Union launched a health insurance marketplace with HealthPlan's help on Suncoast's personal insurance page. It lets credit union members shop, compare and enroll online for individual health coverage.

HealthPlan Services gained broad attention in 2013 when it committed to add up to 1,000 area jobs over five years in exchange for $2.5 million in state and local incentives. At the time it was the largest expansion since Progressive Insurance's plan to add a similar number of jobs in 2003.

It's not clear whether HealthPlan will still add those pledged jobs.

By 2014, the company had annual revenues topping $300 million. That same year, CEO Bak was named Ernst & Young's "Florida Entrepreneur Of The Year" in health care services.

Why did Wipro, a $7.5 billion revenue firm that helped lead the infamous outsourcing boom in the early 2000s, choose to buy HealthPlan Services? Wipro wants to push quickly into the U.S. health care scene, where it already serves more than 100 health care-related clients.

The Tampa deal, for example, gives Wipro greater access to such large U.S. health care insurance customers as MetLife and Allstate.

Clearly, Wipro does not see Obamacare going away, regardless of what some Republican presidential candidates may be promising on the campaign trail.

"The partnership with HealthPlan Services positions Wipro to participate in the shift of the U.S. health insurance industry towards a consumer-centric business model," Wipro senior vice president Jeffrey Heenan Jalil said.

The HealthPlan acquisition is Wipro's largest since buying New Jersey-based Infocrossing in 2007 for $600 million.

The owner of HealthPlan Services that is selling to Wipro is Water Street HealthCare Partners, a Chicago private equity firm that specializes in health care investments. Water Street bought HealthPlan in 2008 from South Florida's Sun Capital Partners, another private equity investor.

Contact Robert Trigaux at rtrigaux@tampabay.com. Follow @venturetampabay.