Capital One Financial Corp. has agreed to acquire General Electric Co.’s health-care finance unit for about $9 billion to build its niche focus in the healthcare market. As part of the acquisition, Capital One get $8.5 billion of GE healthcare-related loans and its Healthcare Financial Services business for a 6 percent premium to par value of all receivables as of June 30, 2015. Capital One expects this acquisition to strengthen its footprint in the niche healthcare market and position its healthcare banking platform for future growth and returns. The company expects to complete the acquisition in the fourth quarter of 2015.
GE Capital, Healthcare Financial Services provides customized financing solutions that help support and grow healthcare organizations, providing financing to companies in various healthcare sectors, including healthcare services, seniors housing, hospitals, medical offices, pharmaceuticals, and medical devices.
Additionally, Darren Alcus, President of GE Capital, Healthcare Financial Services will become the President of Capital One’s healthcare finance business. Capital One will benefit from GE Capital, Healthcare Financial Services’ broad customer base and expert risk management platform as it brings to the new unit the resources of a top 10 U.S. bank, including a more complete suite of lending and depository products, as well as treasury management services.
“This is a strategic investment in a specialty industry segment that we have been building out for the past several years. This addition will catapult us to a leading market position in providing financial services to the healthcare sector,” said Michael Slocum, President of Capital One’s Commercial Bank. “The GE Capital, Healthcare Financial Services team shares our commitment to providing value-added advice and creative financing solutions to the healthcare industry. Together we will deliver a powerful combination of industry-leading expertise and expanded capabilities to our clients.”
