Yesterday, we learned that General Electric (GE) had agreed to sell it’s health-care lending operations to Capital One Financial (COF) for more than $9 billion, continuing the industrial giant’s purge of its financial assets. Since announcing its initiative in April, GE has sold $US26.5 billion worth of real estate assets and a huge lender for private equity takeovers. GE Capital’s healthcare lending business provides financing to healthcare products and services companies, as well as real estate loans to operators of assisted living facilities, nursing homes and medical practices.
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Healthcare Financial Services President Darren Alcus will become Capital One’s president of the healthcare finance business.
“This announcement is the next step in GE’s transformation to a more focused industrial company”, said Keith Sherin, GE Capital chairman and chief executive, in a statement.
GE additionally stated on Tuesday it agreed to promote about $600 million of the unit’s actual property fairness investments to a different purchaser, which it didn’t identify.
The McLean, Virginia-based company bought ING Direct USA for about US$9 billion in 2012, building its deposit-taking bank into one of the largest online lenders in the nation.
“This makes them a much more significant player going forward in the health-care business”, said Jeff Davis, managing director for the financial-institutions group at Mercer Capital.
7/24/2015 – Capital One Financial Corp. had its price target lowered by analysts at RBC Capital from $89.00 to $88.00.
Now it is selling its Healthcare Financial Services business, which lends to a wide variety of companies in the industry, including hospitals, drugmakers and medical device specialists. “The healthcare sector offers tremendous potential for growth, and I am confident that together we will offer the best-in-class expertise and tailored financial products that meet the needs of healthcare businesses across the country”. The big victor, however, might be Capital One.
Image: Capital One aims to boost its healthcare lending operations with the deal.
Credit Suisse and Wells Fargo Securities acted as exclusive financial advisors to Capital One, and Wachtell, Lipton, Rosen & Katz acted as legal advisor to Capital One. The latest transaction brings GE’s announced sales total to about $78bn.
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We at Bidness Etc believe General Electric will be able to raise its stock price above $30 once it completes its long-term strategy. On Jul 22, 2015, the shares registered one year high at $92.10 and the one year low was seen on Feb 2, 2015.
