Capital One announced yesterday (Aug. 11) that it was acquiring GE Capital's health care finance unit for roughly $8.5 billion.
The specific unit that Capital One will be taking over is the loans associated with GE's Healthcare Financial Services business. According to a news release, Capital One will be purchasing the unit for a 6 percent premium cost, but the payments network conveyed that it expects the purchase to help in its overall future growth. The deal is expected to be completed sometime in the fourth quarter.
"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 health care 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 health care industry. Together, we will deliver a powerful combination of industry-leading expertise and expanded capabilities to our clients."
Under Capital One's umbrella, Darren Alcus, President of Healthcare Financial Services for GE Capital, will become the president of Capital One's health care finance business. The management team from the Healthcare Financial Services will also join Capital One's health care lending business side. GE Capital's Healthcare Financial Services is designed to provide financing solutions aimed at helping health care organizations grow their services across various sectors of the industry.
"We are excited to join forces with the health care finance professionals at Capital One. They share our vision for providing the financial solutions that this complex industry demands," said Alcus. "The health care 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 health care businesses across the country."