IBM to acquire Truven Health Analytics for $2.6bn

Feb 18, 2016, 2:22 PM EST
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IBM will acquire Truven Health Analytics for $2.6 billion as the firm expands its healthcare capabilities.

Bloomberg reports:

More than more than 8,500 hospitals, insurers and government agencies use Truven to manage and analyze the reams of data generated by the health industry. Veritas Capital, a New York-based private equity firm, bought Truven in 2012 for $1.3 billion, according to company filings. The deal is expected to be completed later this year. The acquisition of Ann Arbor, Michigan-based Truven will be International Business Machines Corp.’s biggest purchase in the three years under Chief Executive Officer Ginni Rometty. IBM has invested heavily in data and technology to improve its products and services for the health-care industry, centered on its Watson Health business unit. Watson is IBM’s collection of artificial-intelligence technologies used to interpret, analyze and predict data patterns. Adding more information from businesses like Truven will help IBM’s software work better and can provide more useful insights.

Most of the data in health-care is in disparate databases,” Deborah DiSanzo, general manager at IBM Watson Health, said in an interview. “The strategy of IBM is to bring this data together and democratize it so that both IBM and our ecosystem of partners can build health solutions on top of it.” Veritas, which invested about $470 million of equity when it bought Truven, will make roughly a 250 percent gain, a person familiar with the matter said. Andrew Cole, a Veritas spokesman at Sard Verbinnen & Co., declined to comment on the firm’s profit. IBM shares touched a high of $134 earlier on Thursday, their biggest jump since January 2013. The stock had declined 8.4 percent this year through Wednesday.

Reuters writes:

IBM said Truven will bring more than 8,500 clients, including U.S. federal and state government agencies, employers, health plans, hospitals and others, to its IBM Watson Health portfolio. IBM, which launched its Watson Health unit in April 2015, said that at the expected close of the Truven acquisition later this year, its cloud-based system will house health-related data representing around 300 million patient lives. The Truven data will be integrated with Watson's data, used to identify health cost savings, improve healthcare outcomes, fight fraud and make operations more efficient. "With this acquisition, IBM will be the world's leading health data, analytics and insights company, and the only one that can deliver the unique cognitive capabilities of the Watson platform," Deborah DiSanzo, general manager for Watson Health, said in a statement. With the latest deal, IBM said it will have invested more than $4 billion to acquire and build its healthcare capabilities.