IT Pro is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Learn more

IBM to sell off Watson Health assets

Private equity firm Francisco Partners is buying a large portion of the AI healthcare unit for "more than $1 billion"

IBM has announced that it has entered into an agreement to sell its Watson Health assets to private equity firm Francisco Partners.

The deal, which is expected to close in the second quarter of 2022, will allow IBM to focus on its platform-based hybrid cloud and artificial intelligence (AI) strategy, according to the tech giant’s SVP Tom Rosamilia.

“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,” he stated.

Related Resource

A buyer’s guide to board management software

Improve your board’s performance

Whitepaper cover with photo of someone using a tablet

Terms of the deal were not announced, but Bloomberg reports that the value of the assets being sold is more than $1 billion.

Founded in 1999, Francisco Partners specialises in investing in tech companies, including businesses within the healthcare sector.

Commenting on the acquisition, Francisco Partners co-president Ezra Perlman said that the San Francisco-based private equity firm has followed IBM’s journey in healthcare data and analytics for a number of years and has “a deep appreciation for its portfolio of innovative healthcare products”.

Principal Justin Chen added that Francisco Partners looks forward to “supporting the talented employees and management team”, which is expected to continue in similar roles in the new standalone company with a “focus on growth opportunities to realise its full potential, and delivering enhanced value to customers and partners”.

The sale of the healthcare data and analytics unit comes amidst the wave of investments in healthcare technology fuelled by the pandemic. For instance, Oracle recently acquired the digital medical records business Cerner for $28.3 billion (£21.4 billion), with plans to use the company as an anchor asset into the healthcare sector.

IBM’s focus on AI and cloud growth was cemented in October 2020, when it announced the split from its Managed Infrastructure Services business, now known as Kyndryl, in what is now known as one of the most significant tech industry moves of that year. At the 2020 Think Digital virtual conference, CEO Arvind Krishna said that “every company will become an AI company, not because they can, but because they must”. 

Featured Resources

2022 State of the multi-cloud report

What are the biggest multi-cloud motivations for decision-makers, and what are the leading challenges

Free Download

The Total Economic Impact™ of IBM robotic process automation

Cost savings and business benefits enabled by robotic process automation

Free Download

Multi-cloud data integration for data leaders

A holistic data-fabric approach to multi-cloud integration

Free Download

MLOps and trustworthy AI for data leaders

A data fabric approach to MLOps and trustworthy AI

Free Download

Recommended

The state of Salesforce 2022-2023
Whitepaper

The state of Salesforce 2022-2023

22 Nov 2022
2022 Magic Quadrant for data integration tools
Whitepaper

2022 Magic Quadrant for data integration tools

22 Nov 2022
2022 IBM's Security X-Force cloud threat landscape report
Whitepaper

2022 IBM's Security X-Force cloud threat landscape report

22 Nov 2022
Forrester Report: Automate or die
Whitepaper

Forrester Report: Automate or die

22 Nov 2022

Most Popular

Empowering employees to truly work anywhere
Sponsored

Empowering employees to truly work anywhere

22 Nov 2022
How to boot Windows 11 in Safe Mode
Microsoft Windows

How to boot Windows 11 in Safe Mode

15 Nov 2022
The top 12 password-cracking techniques used by hackers
Security

The top 12 password-cracking techniques used by hackers

14 Nov 2022