Information services company Thomson Reuters announced Monday that it is selling its Healthcare business for $1.25-billion (U.S.) in cash.
The sale to an affiliate of private equity firm Veritas Capital is expected to close in the next few months subject to regulatory and other approvals.
The Healthcare segment provides data, analytics and performance benchmarking services to hospitals, health systems, employers, health plans, government agencies and health-care professionals.
Thomson Reuters chief executive James Smith said that with the completion of the divestiture, the company "will be even more focused on our core global businesses."
Robert McKeon, chairman of Veritas Capital, said his company is buying what he called the "pre-eminent health-care analytics company in the industry today."
"The acquisition will provide us with a unique and exciting opportunity to add a truly outstanding business and world-class management team to our portfolio and we look forward to building upon our experience in the health-care analytics market."
The sale is part of the professional news and information provider's plan to shed non-core businesses to concentrate on faster growth areas like financial risk and compliance.
"We expect management will use the proceeds to invest or make acquisitions in growing segments of the business," UBS analyst Phillip Huang wrote in a note.
"This is consistent with CEO Jim Smith's playbook ... and we expect management will use this same strategy to try to accelerate growth in the Financial & Risk segment."
Thomson Reuters said last June that it intended to sell its Healthcare unit, which provides data, analytics and other services to improve efficiency to hospitals, government agencies and healthcare professionals. The sale was temporarily suspended in December due to challenging economic conditions, the company said at the time.
In 2010, Healthcare pulled in approximately $450-million in revenue with an operating margin of about 19 per cent.
The deal is not subject to any financing condition, the two companies said in a release, adding that Veritas has obtained debt financing commitments for the transaction.