GE Healthcare announced that it plans to sell portions of its health information technology lines to Veritas Capital, a private equity investment firm, in a deal valued at $1.05 billion.
According to a press release, an affiliate of Veritas has entered into a definitive agreement with GE to acquire the company’s enterprise financial management (revenue cycle, Centricity Business), ambulatory care management (Centricity Practice Solution) and workforce management (formerly API Healthcare) assets. The product lines are part of GE Healthcare’s Value-Based Care Division.
The transaction is expected to close during the third quarter of 2018, subject to customary closing conditions and regulatory approvals. GE Healthcare is the New York City-based, $19 billion healthcare business of GE.
Back in October, there were media reports that GE was exploring selling off its transportation and all or parts of its health IT business. A Wall Street Journal article at the time reported that the potential move could be part of new CEO John Flannery’s plans to divest more than $20 billion worth of assets in the next two years.
In a statement, Jon Zimmerman, vice president and general manager of Value-Based Care Solutions at GE Healthcare, said, “Veritas Capital is the ideal firm to provide the focus and investment to take our business to the next level of scale and performance. Our team has significant knowledge and expertise in the healthcare IT space, and by operating as a standalone business under Veritas’ ownership, we now have the opportunity to further revitalize our product portfolio and pursue complementary acquisitions to better serve patients, providers and payers.”
Zimmerman also stated, “With Veritas’ support and resources, we are excited to continue deepening our commitment and capabilities to help healthcare providers manage their financial, clinical, and employee workflows across the continuum of care.”
Ramzi Musallam, CEO and managing partner of Veritas Capital, said in a statement, “We see a tremendous opportunity to invest in this business and partner with management to take advantage of a $9 billion market that continues to benefit from favorable sector trends, particularly a real and urgent need to digitalize our healthcare system. Similar to our previous healthcare technology investments, all of which have been corporate carve outs, we will be deeply customer-focused, and invest significantly in people, technology and infrastructure to support the evolving requirements of the company’s diverse customer group. GE has built a highly regarded platform with a strong product set and an experienced team, and we look forward to supporting management as they redouble their focus on delivering superior value to all customers.”
GE Healthcare executives said the company plans to continue offering health IT solutions in data analytics, command centers, advanced visualization and image management tools.
Kieran Murphy, president and CEO of GE Healthcare, said in a statement, “We’re confident this business will flourish under Veritas Capital, while 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.”
The healthcare technology space has been a key focus area for Veritas Capital, as illustrated by its recent investments in Truven Health Analytics and Verscend Technologies. Veritas executives said the firm will work alongside the GE management team to ensure a seamless transition of the business into a standalone company.