Siemens exploring options in Healthineers carve-out

Despite previous indications of an initial public offering, Siemens is exploring all options in plans to list its healthcare division, Siemens Healthineers.

Siemens announced its intention to spin off Healthineers in November, but the company declined to provide any other details about the timing and framework of the deal.

CFO Ralf Thomas said Siemens is “now following three very interesting alternatives” in an interview with Bloomberg TV. While he cautioned investors from looking at Siemens’ deal with Spanish firm Gamesa as a blueprint for their plans with Healthineers, Thomas said they weren’t ruling anything out.

Siemens merged its wind-power business with Gamesa in June, creating the world’s largest wind farm manufacturer.

Instead, look for Siemens to either sell new shares in an initial public offering or spin the business off to existing shareholders—something they with lighting business Osram.

An initial public offering for Healthineers could be worth $33 to $44 billion, even as Healthineers lagged behind other Siemens divisions—it was the only business not to exceed market expectations for profit, following 15 percent year-on-year growth in the first quarter of 2017.

"It's obvious that after a really strong quarter... you cannot necessarily keep that level of pace," Thomas said during a quarterly earnings call. "I believe the momentum is going to pick up again.”

Siemens Healthineers’ core business is medical imaging, offering a full complement of scanners and support equipment across a wide variety of modalities. The firm is also making forays into population health, most recently with the April acquisition of Medicalis, a San Francisco-based company specializing in clinical decision support, imaging workflow management, and referral management.

The Medicalis purchase follows a partnership with IBM Watson announced in October, with the goal of helping care providers transition to value-based care using population health management. The population health market is expected to reach $31.6 billion by 2020 according to a MarketsandMarkets report, underscoring the potential Siemens sees in the field.