Apollo Hospitals plans to sell off its business process outsourcing division, Apollo Health Street. The plan is part of the healthcare service provider’s initiative to move out of non-core businesses. Formed in 1999, Apollo Health Street is an associate company of Apollo Hospitals Enterprises, in which the latter holds 40 per cent stake. The company had acquired US-based BPO Zavata in 2005 for $170 million.

Private equity firms One Equity Partners and Temasek Holdings in this deal backed the company, while the debt component came from Bank of India and Barclays Capital.

In order to relieve itself from debt, the company had planned to float an initial public offering in 2008 by diluting 15 per cent stake for $70 million. However, it had withdrawn from the process after the market turned unfavorable.

“The company took time to turn profitable as some of the key clients of Zavata had left the BPO after its acquisition. However, being in the niche segment of revenue cycle management, Apollo Health Street was not much impacted by the global recession,” a company official told Financial Chronicle.

The company operates from 13 locations, including four offices in India. In 2010, Apollo Health Street formed an exclusive alliance with US-based Huron Healthcare. It also formed a new partnership with Roxborough Memorial Hospital in the US to provide full business office programme. It is also managing billing and receivables for Reading Hospital and Medical Centre’s small balance accounts.

“The business has grown and things have turned positive now. However, Apollo does not want to be in a non-core business for long. So it wants to sell off the BPO arm,” the official said.

Sometime back, Apollo also had plans to have some strategic partners in the BPO business. But, now it is planning to get out of it.