GE Healthcare is offloading health IT assets to private equity group Veritas Capital for $1.05 billion in cash. The sale of the value-based care unit narrows GE’s focus to the diagnostic imaging and mobile monitoring businesses that generate most of its medtech sales.
The takeover will give Veritas control of GE’s assets for managing health finances, workforces and ambulatory care. Veritas, which lists Truven Health Analytics and Verscend Technologies among its health IT investments, will turn the acquired units into a standalone company. GE is now working with Veritas on the transition of the U.S. and Indian sites and staff that make up the business units.
Selling the units will leave GE with a more focused but still substantial healthcare business. GE groups the units in its IT and digital solutions business, which pulls in around $2 billion a year. Some of the units responsible for those sales will remain with GE after the deal closes in the third quarter.
The remaining IT businesses will sit alongside imaging, mobile diagnostics and monitoring and life sciences in the slimmed-down organization. GE’s imaging and mobile units generate about $12 billion a year and remain a big part of the company’s plans.
“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,” GE Healthcare CEO Kieran Murphy said in a statement. “We will continue to lead in data analytics, command centers, advanced visualization and image management tools to create better customer and patient outcomes.”
The sale of the health IT assets is an early manifestation of John Flannery’s vision for GE. Flannery, a former CEO of GE Healthcare, took over the broader business last year and promptly outlined plans to sell $20 billion worth of businesses. The selloff strategy reflects Flannery’s belief that GE’s problems stem from the complexity of the company.