Francisco Partners completes $1B buyout of IBM Watson Health

Global investment firm Francisco Partners has closed its $1 billion acquisition of the healthcare data and analytics assets that were part of IBM’s Watson Health business. The deal was previously announced in January.

Francisco Partners will keep the business as a standalone entity under the moniker Merative. It will be headquartered in Ann Arbor, Michigan. The business will provide services to the global healthcare ecosystem, serving clients in life sciences, provider, imaging, health plan, employer, and government health and human services sectors. The company’s products will be divided into six product families, including Health Insights; MarketScan; Clinical Development; Social Program Management and Phytel; Micromedex, and Merge Imaging solutions.

Gerry McCarthy will lead the new business. She is a seasoned healthcare CEO with 30 years of experience in healthcare information technology. She most recently served as CEO of eSolutions, a Francisco Partners portfolio company, which exited to Waystar in October 2020. Prior to that, she also served as president of TransUnion Healthcare and an executive at McKesson. Paul Roma, general manager of the Watson Health business, will transition to senior advisor at Francisco Partners. 

The acquisition––and Francisco Partners’ investment––will give Merative significant resources and opportunities for new investment, acquisitions, partnerships and growth, according to Francisco Partners. In addition, True Wind Capital, a San Francisco-based private equity firm focused on investing in leading technology companies, and global investment firm Sixth Street are investing in Merative. Francisco Partners has invested in more than 400 companies over the last 20 years, with more than $45 billion in assets under its belt.