As General Electric Co. (GE, Financial) looks to reshape itself, private equity firm Veritas Capital revealed on Monday it is buying its health care technology unit for $1.05 billion in cash.
The unit, which consists of GE’s revenue-cycle, ambulatory care and workforce management software assets, is Veritas’ latest target in the health care technology space. The New York-based firm has also recently taken an interest in Truven Health Analytics and Verscend Technologies.
Ramzi Musallam, Veritas’ CEO and managing partner, said in a statement the firm sees a “tremendous opportunity” in the business as it aims to benefit from the sector’s favorable trends.
“Similar to our previous health care 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,” he said. “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.”
Jon Zimmerman, vice president and general manager of GE Healthcare’s Value-Based Care Solutions, also expressed his excitement for the deal, declaring Veritas is the “ideal firm” to take its business to the next level.
“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,” he said.
According to Kieran Murphy, CEO of the conglomerate’s $19 billion health care division, GE Healthcare, the unit will continue to invest in core digital solutions like smart diagnostics and artificial intelligence.
Despite GE’s optimism for the deal, the market reacted negatively to the news. Shares of the Boston-based industrial conglomerate were down more than 3% on Monday afternoon at $13.02. Year to date, GuruFocus estimates the stock has tumbled 25%.
GE said the deal is expected to close in the third quarter.
Disclosure: No positions.
