ePLDT's BPO Subsidiary Acquires Springfield Service Corporation for $44 million

SPi, a leading global business process outsourcing (BPO) company, today announced that it has acquired, through a wholly owned US subsidiary, 100% of Springfield Service Corporation for an aggregate purchase price of US$ 44 million, with the potential for future earn out payments.

Springfield Service Corporation (SSC), the 10th largest player in the medical billing and revenue cycle management market, has 383 employees operating in 5 locations in the US and provides billing and accounts receivable management services for over $1.3 billion of physician charges annually. SSC is estimated to generate in excess of US$30 million in revenues over the next twelve months. The 21-year-old company also offers practice management services including patient scheduling, coding and compliance assistance, consulting and specialized reporting services. SSC is known for its superior operational capability on the GE Centricity Business System (formerly known as IDX Flowcast) and EPIC, two of the leading platforms in the industry, strong client relationships, and experienced management team.

Ernest L. Cu, President and CEO of SPi, said, "We have been tracking companies in the medical billing space for some time with the goal of finding one to acquire whose corporate culture and values match our own. SSC fits the bill. Their annuity-based business nicely complements our existing Healthcare platform and provides an excellent entry point for us into this rapidly growing $25 billion industry." Cu went on to say: "The inclusion of SSC’s service offerings in our Healthcare portfolio allows us to further strengthen our relationships with the more than 400 hospitals, multi-specialty clinics and physician practices that we currently serve."

The US healthcare industry accounts for 15% of US GDP and is the largest segment in the US economy. In 2003, US healthcare expenditures reached nearly $2.0 trillion. Healthcare costs have continued to rise by 18% annually since then. Currently $4.2 billion in medical billing work is being outsourced each year, and spending in this area is expected to grow by 7% annually. The medical billing sector is ideally suited for outsourcing due to the high volume of transactions and the ongoing rising costs of healthcare.

"At US$ 44 million, the SSC acquisition is the largest to date for SPi. Further it is an excellent example of how we are implementing our strategic plan to accelerate growth and strengthen our position in the BPO arena," stated Ray C. Espinosa, President and CEO of ePLDT. "We are delighted to support SPi’s expansion of its Healthcare platform and to be adding another annuity-based business to our overall BPO portfolio."

"The management team of SSC is equally pleased with the business combination," stated Mike Beninato, President and CEO of SSC. "Both SPi and SSC share a vision to reduce healthcare costs while improving quality through streamlining business processes, and improving patient care. This acquisition is tremendous news for our customers and employees, who will benefit from the resources available from SPi. We look forward to SSC’s continued growth and profitability in the years ahead."