IBM and Francisco Partners, a global investment firm that specializes in partnering with technology businesses, announced that the companies have signed a definitive agreement under which Francisco Partners will acquire healthcare data and analytics assets from IBM that are currently part of the Watson Health business. The assets being acquired include extensive and diverse data sets and products, including Health Insights, MarketScan, Clinical Development, Social Program Management, Micromedex and imaging software offerings.
Francisco Partners is a private equity firm that specializes in investments in technology and technology-enabled service businesses. Since its launch in 1999, Francisco Partners has invested in more than 400 technology companies, making it one of the most active and longstanding investors in the technology industry. The firm has more than $30 billion in assets under management.
“Today’s agreement with Francisco Partners is a clear next step as IBM becomes even more focused on our platform-based hybrid cloud and AI strategy,” said Tom Rosamilia, Senior Vice President, IBM Software. “IBM remains committed to Watson, our broader AI business, and to the clients and partners we support in healthcare IT. Through this transaction, Francisco Partners acquires data and analytics assets that will benefit from the enhanced investment and expertise of a healthcare industry focused portfolio.”
IBM is making this sale just as the healthcare vertical is heating up. During 2021, we saw a number of larger companies move towards more vertical solutions. In April 2021, Microsoft bought Nuance Communications in a deal valued at $19.7 billion. Later, in December 2021, Oracle Corporation bought the electronic health records company Cerner Corporation for $28.3 billion. While both deals are pending regulatory approval, it shows how these large companies value the health vertical and are willing to invest large sums into it.
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. The transaction is expected to close in the second quarter of this year and is subject to customary regulatory clearances. Financial terms of the transaction were not disclosed.
