International Business Machines Corp. is investigating a possible sale of its IBM Watson Health business, according to people familiar with the matter, as the technology giant’s new CEO streamlines the company and becomes more competitive in cloud computing.
IBM is exploring alternatives to the unit, such as a sale to a private equity firm or an industrial player or a merger with a blank check company, the people said. The unit, which uses artificial intelligence to help hospitals, insurers and drug manufacturers manage their data, has annual sales of about $ 1 billion and is currently unprofitable, the people said.
Brands include Merge Healthcare, which analyzes mammograms and MRIs; Phytel, which helps in communication with the patient; and Truven Health Analytics, which analyzes complex health data.
It’s not clear how much the company could fetch in a sale, and there may not be one.
IBM, with a market value of $ 108 billion, has lagged while cloud computing rivals Microsoft Corp. and Amazon.com Inc. rise to more than ten times higher valuations. The Armonk, NY company has said it is focused on boosting its hybrid cloud business while leaving some unrelated businesses.