GE reportedly files paperwork for IPO of health-care unit

Timothy Tai | Boston Globe | Getty Images

Massachusetts Governor Charlie Baker speaks during the opening ceremony for the GE Healthcare Life Sciences headquarters in Marlborough, Mass., on June 23, 2016.

General Electric has confidentially filed the paperwork to spin out its health-care unit, GE Healthcare, in an initial public offering that would likely come next spring, Bloomberg News reported.

GE is working with Goldman Sachs, Bank of America, Citigroup, JPMorgan Chase and Morgan Stanley on the planned listing, Bloomberg said, citing people familiar with the matter. The new public company would rank among the largest in the world.

Shares of GE were more than 3 percent higher in premarket trading Wednesday.

GE Healthcare, a dominant player in hospital and lab equipment, generated roughly $19 billion in revenue and $3.4 billion in profit last year. It accounted for 15.8 percent of the conglomerate’s total sales, and 43.2 percent of its operating profit in 2017.

The company first announced its plans to spin off GE Healthcare, under the leadership of CEO Kieran Murphy, in late June. General Electric has previously said spinning out the health unit makes sense because it allows the company to double down on its core industrial and energy businesses.

However, the terms of the spin off came into question after John Flannery was removed as chairman and CEO of the industrial conglomerate in October and replaced with former Danaher CEO Lawrence Culp. At the time, GE told CNBC the health unit “plans to continue working toward separation of GE.’

A GE spokesperson declined to comment to Bloomberg report but said, “As we announced in June, GE intends to separate its healthcare business, but we have not confirmed the form or timing.”

“As an independent global healthcare business, GE healthcare will have greater flexibility to pursue future growth opportunities, react quickly to changes in the industry and invest in innovation,” GE added in an emailed statement.

The health-care unit has drastically grown from its origins in 1896 when it began developing X-rays. The company has become a leader in the medical health-care field. It’s already a dominant player in hospital and lab equipment and is a growing force in medical records, health-care software and is expanding its mark on gene therapy research.

Murphy is expected to grow the company through acquisition and enter more untested, less-regulated markets in underdeveloped nations to ensure its future growth and stay ahead of the company’s main competitors: Siemens, Philips and Canon Medical Systems — formerly known as Toshiba Medical Systems — which all make medical imaging technology like GE.

Read the full Bloomberg report here.