Tech major IBM has announced to sell its healthcare data and analytics assets from the company (currently part of the IBM Watson Health business) to Francisco Partners, a leading global investment firm.
According to top company sources, the transaction is pegged at around $1 billion. The company has not disclosed the financial terms of the transaction. The assets on the block include extensive and diverse data sets and products, including Health Insights, MarketScan, Clinical Development, Social Program Management, Micromedex, and imaging software offerings.
The transaction is expected to close in the second quarter of this year, IBM said in a statement late on Friday. “The agreement with Francisco Partners is a clear next step as IBM becomes even more focused on our platform-based hybrid cloud and AI strategy,” Tom Rosamilia, Senior Vice President, IBM Software said.
“IBM remains committed to Watson, our broader AI business, and to the clients and partners we support in healthcare IT,” Tom said. Watson was one of IBM’s highest-profile initiatives in recent years and a big bet on the growing healthcare sector.
IBM currently has a market value of $108 billion, way behind its Cloud-computing rivals like Amazon and Microsoft. In its fourth quarter, cognitive applications revenue, which includes Watson Health, came to $1.5 billion, a decrease of 2 per cent year over year.
IBM Watson was one of the “strategic imperatives” under former CEO Ginni Rometty. “We have followed IBM’s journey in healthcare data and analytics for a number of years and have a deep appreciation for its portfolio of innovative healthcare products,” Ezra Perlman, Co-President at Francisco Partners said.
Under the terms of the agreement, the current management team will continue in similar roles in the new standalone company, serving existing clients in life sciences, provider, imaging, payer and employer, and government health and human services sectors.