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Wipro acquires GE Medical Systems' IT arm

Fakir Chand in Bangalore

Wipro Ltd, the Bangalore-based global IT services company, has acquired the Hyderabad-based GE Medical Systems Information Technologies Ltd, a subsidiary of the US-based GE Medical Systems, for Rs 286.50 million ($5.73 million).

The acquisition of the 100 percent stake in an all-cash deal includes the subsidiary's healthcare information systems intellectual properties.

Announcing the acquisition of the Rs 110-million ($2-million) company in Bangalore on Thursday after the Wipro's annual general meeting, Wipro Vice-Chairman D A Prasanna said Wipro GE Medical Systems' IT subsidiary would be called Wipro Healthcare IT Ltd once the transaction was completed.

The new company has a team of 130 professionals, including R&D scientists and engineers. It was set up in October 2000 as a joint venture by GE Medical Systems and the Hyderabad-based Citadel Health Ltd to develop software packages and provides software solutions in healthcare and hospital information system.

GE Medical Systems had 60 per cent stake in the company with Citadel holding the remaining 40 per cent of the paid-up capital, which was around $0.75 million.

As a leading provider of healthcare IT services in India and Middle East, the company had installed its comprehensive ERP software consisting of hospital information system package (HiRepS) in about 20 leading hospitals, including the Apollo group, Fortis Healthcare, Manipal group, and Wockhardt in India, and Saudi German Hospital in Saudi Arabia.

Wipro Chairman Azim H Premji told rediff.com that the company would be targeting the global market for selling its patented products and offer services to hospitals worldwide.

"We will be marketing the healthcare IT products and services in the US, Europe, Far East, the Middle East, Asia Pacific region, and the Far East. It's a multi-billion dollar global market. We will leverage our domain expertise with the synergies of group IT companies," Premji asserted.

Even after acquisition, GE Medical Systems will continue to distribute the company's healthcare IT products in the Middle East and South-East Asian markets such as Indonesia and Thailand, while Wipro GE Medical Systems Ltd will distribute the same products in South Asia.

According to company's Managing Director Vishweshar Konda, the total market size of healthcare IT products in India was Rs 300 million during the last fiscal year (2001-02), with leading organized players like TCS, Siemens, and OCS dominating the field.

"The market is expected to grow up to Rs 750-800 million during this fiscal. We will also be targeting major government and corporate hospitals," Konda added.

Incidentally, Konda is the son-in-law of Apollo Hospitals' Group Chairman Pratap Reddy.

Prasanna, who is also the CEO of Wipro Healthcare and Life Sciences, set up early this year, also declared that during the first quarter, the new company has entered into long-term annual contract with four leading US-based global customers, including one for clinical process outsourcing.

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