GE files to spin-off healthcare unit
January 15, 2019
NEW YORK – General Electric has submitted a confidential filing to spin out its healthcare business into a publicly traded company, with an IPO likely taking place early this year, according to a report from Bloomberg.
The company is reportedly working with Goldman Sachs, Bank of America, Citigroup, JPMorgan Chase and Morgan Stanley on the move. GE first announced plans to form a standalone healthcare company last June, to narrow the larger conglomerate’s focus to the aviation, power and renewable energy industries.
An independent GE Healthcare would still have a broad portfolio of its own – with work spanning diagnostic imaging hardware, life sciences research, big data analytics and patient monitoring – as well as 52,000 employees and an enterprise value of up to $70 billion, according to previous Bloomberg estimates.
Nonetheless, executives described the proposed company as a leaner, more nimble operation capable of responding faster to changes in the industry, while retaining its GE name and branding.
“We will build on strong customer demand for integrated precision health solutions and great technology with digital and analytics capabilities as we enter our next chapter,” GE Healthcare CEO Kieran Murphy (pictured) said at the time.
Murphy will continue to lead the new company, according to previous statements, which will invest in core digital solutions such as smart diagnostics, connected devices and artificial intelligence.
In 2017, GE’s healthcare division brought in $19.1 billion in revenue, with $10.2 billion in medtech-focused sales, making it the ninth largest medtech company by that measure. According to EvaluateMedtech, the latter figure is expected to grow to $12.9 billion by the end of 2024.
In the $40 billion diagnostic imaging market, GE ranks second, nestled in between industry leader Siemens Healthineers, which held its own IPO last year, and Philips, the three of which each take home about 20% pieces of the global market share.
Healthineers’ IPO on the Frankfurt exchange was the second-largest in Germany since the start of the millennium, raising about $5.2 billion through its parent conglomerate’s sale of a 15% stake in the company. Siemens AG remains a majority shareholder.