Capital One closes deal to buy GE’s Healthcare Lending Unit





Capital One Financial Corporation COF has completed a deal to acquire General Electric Company's GE healthcare-related loans worth roughly $8.5 billion and its Healthcare Financial Services ("HFS") business. The deal was announced in last August.

The completion of the transaction combined Capital One's existing healthcare lending business with HFS. This led to the formation of Capital One Healthcare, a major provider of healthcare financial services with approximately $11 billion in outstanding balances.

Capital One Healthcare will provide personalized financing solutions to companies in various sectors, including healthcare services, hospitals, senior housing, medical offices, pharmaceuticals, medical devices and healthcare IT.

Notably, former president of GE Capital HFS, Darren Alcus, has been named as the president of Capital One Healthcare. Further, Capital One has retained HFS management teams and employees.

Alus said, "Our new combination truly represents a best-in-class group of industry domain experts and financing professionals, with a proven track record of delivering critical financial solutions for clients across the healthcare spectrum."

According to Capital One's latest quarterly filing, loans to healthcare industry constitute just about 5% of its total commercial loans as of Sep 30, 2015. Michael Slocum, president of Capital One's commercial Bank, said, "With the strength of this combination, we are poised to capitalize on the tremendous growth potential we see in the healthcare sector."

This is the fourth major deal for Capital One since the 2008 financial crisis. The company had acquired Chevy Chase Bank, F.S.B. in 2009, followed by the buyout of ING Direct from ING Groep N.V. ING and the U.S. card portfolio from HSBC Holdings plc HSBC in 2012.

The just-completed deal will bolster Capital One's revenue growth, going forward. Given the company's strong geographic footprint and stable banking operations, we believe it will be able to garner significant market share in healthcare lending.