January 21, 2022
Global investment firm Francisco Partners is buying IBM’s health care data and analytics assets, part of Big Blue’s Watson Health business. The firm will acquire products including Health Insights, MarketScan, Clinical Development, Social Program Management, Micromedex and imaging software.
The companies didn’t disclose the financial terms of the transaction.
IBM’s Tom Rosamilia
Tom Rosamilia is senior vice president at IBM Software.
“Today’s agreement is a clear next step as IBM becomes even more focused on our platform-based hybrid cloud and AI strategy,” Rosamilia said. “IBM remains committed to Watson, our broader AI business, and to the clients and partners we support in health care IT. Through this transaction, Francisco Partners acquires data and analytics assets that will benefit from the enhanced investment and expertise of a health care industry focused portfolio.”
Since its launch more than 20 years ago, Francisco Partners has invested in more than 400 technology companies. This makes it one of the most active and longstanding investors in the technology industry. Francisco Partners has extensive experience in health care technology, the company said. Its health care investments have focused on companies that are leveraging technology to provide innovative products and solutions. Select current and past investments in the sector include Availity, eSolutions, Capsule, GoodRx, Landmark, QGenda, Trellis, and Zocdoc.
Innovative Health Care Products
Francisco Partners’ Ezra Perlman
Ezra Perlman is co-president at Francisco Partners.
“We have followed IBM’s journey in health care data and analytics for a number of years. We have a deep appreciation for its portfolio of innovative health care products,” Perlman said. “IBM built a market-leading team and provides its customers with mission critical products and outstanding service.”
Justin Chen, principal at Francisco Partners, added that partnering with corporations to carve out divisions has been a core focus of the investment firm.
“We look forward to supporting the talented employees and management team, helping the standalone company focus on growth opportunities to realize its full potential, and delivering enhanced value to customers and partners,” he said.
Not Gaining Traction
Damo Consulting’s Paddy Padmanabhan
Paddy Padmanabhan is founder and CEO of Damo Consulting. The firm works in growth strategy and digital transformation for health care enterprises and global technology companies.
Padmanabhan said IBM was not gaining traction in the health care market while others such as Google and Microsoft have pulled ahead. The AI space has also been evolving and industry leaders have invested in harnessing data and generating insights in new and innovative ways, he added. This is especially the case with cloud-based models.
“In the current competitive landscape, IBM would not be considered a significant player in health care,” Padmanabhan said. “Selling off the data assets essentially means an end to the Watson Health experiment. However, it may allow IBM as an organization to refocus and develop a new approach to health care.”
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