GE to Sell Part of Health-Care Division to Veritas Capital for $1.05 Billion–Update
By Aisha Al-Muslim
General Electric Co. has reached a deal to sell part of its health-care information-technology business to private-equity firm Veritas Capital for $1.05 billion in cash, the latest move from the conglomerate to streamline its operations.
Veritas said Monday that an affiliate entered into an agreement to buy GE Healthcare’s value-based care division, comprising of Enterprise Financial Management, Ambulatory Care Management and Workforce Management, formerly API Healthcare.
Veritas said it would work alongside GE management to transition the business into a stand-alone company. The transaction is expected to close during the third quarter.
“Our team has significant knowledge and expertise in the health-care IT space, and by operating as a stand-alone business under Veritas’ ownership, we now have the opportunity to further revitalize our product portfolio and pursue complementary acquisitions,” said Jon Zimmerman, vice president and general manager of value-based care solutions at GE Healthcare, in prepared remarks.
GE Chief Executive John Flannery has discussed plans to divest about $20 billion worth of assets as part of his strategy to turnaround the struggling conglomerate. In October, The Wall Street Journal reported GE was seeking a buyer for part or all of its health-care information-technology business, people familiar with the matter had said at the time.
GE Healthcare, which makes MRI machines and other equipment used in hospitals and laboratories, is one of the company’s biggest divisions with about $19 billion in revenue last year. The company is selling a small part of that division that provides software to manage health-care staffing and payroll services.
“GE Healthcare will continue to significantly invest in core digital solutions, such as smart diagnostics, connected devices, AI and enterprise imaging, that will drive precision health for our customers,” Kieran Murphy, president and chief executive of GE Healthcare, said in prepared remarks.
Veritas has been focusing on health-care technology investments, all of which have been corporate carve-outs, the company said. It acquired Truven, formerly the health-care division of Thomson Reuters Corp., for $1.25 billion in 2012 and sold the business to International Business Machines Corp. for $2.6 billion in 2016.
In 2016 Veritas acquired Verisk Health, the health-care services business of Verisk Analytics Inc., in a roughly $820 million deal. Verisk Health was rebranded as Verscend Technologies Inc.
GE shares fell 3.5% to $13.01 in afternoon trading Monday amid a broader market selloff. The stock is down 56% in the past year.