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IBM to Acquire Truven Health Analytics, as Interest in Health Care Data Picks Up

LLR Partners, Thoma Bravo and Wipro recently made deals in the sector

IBM (NYSE: IBM) has agreed to purchase Truven Health Analytics for $2.6 billion, its fourth health data-related acquisition in less than a year.

Closely held Truven provides cloud-based data management and analytics to more than 8,500 health-care clients, including hospitals, insurers and government agencies, the companies said Thursday in a statement. The deal is expected to be completed later this year, they said.

Dealmakers seeking health care data providers are turning to the middle market.LLR Partners acquired a stake in Phreesia Payment Services as part of a $30 million investment; Thoma Bravo LLC has purchased MedeAnalytics; and Wipro Limited (NYSE: WIT) is acquiring HealthPlan Services from Water Street Health Care Partners. Heath care data providers have becoming attractive targets, thanks to the Affordable Care Act.

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 analytics offerings to the health-care industry, centered on its Watson Health business unit. Watson technology uses machine learning algorithms to provide prescriptive and predictive analyses. With more data, these algorithms work better and can provide more useful insights.

The success of Watson -- which Rometty has called her moonshot -- is integral to IBM’s future as the company struggles to reverse sales declines for the past 15 consecutive quarters. The Armonk, New York-based company last year bought Merge Healthcare for $1 billion to gain medical-imaging data and technology. IBM also acquired health-care big data analytics provider Explorys and population health technology seller Phytel.

After integrating Truven’s data from about 215 million individuals, IBM will have amassed various kinds of health- related information from 300 million patients, the company said.

 

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