3M Co. will acquire the healthcare technology business of M(ASTERISK)Modal for about $1 billion, officials announced Wednesday.
The deal is expected to give Maplewood, Minn.-based 3M a healthcare technology firm specializing in cloud-based, conversational artificial intelligence systems that help physicians capture patient information so they can spend more time with their patients and provide higher quality of care.
M(ASTERISK)Modal's technology unit is based in Pittsburgh, has 750 workers and generates about $200 million a year in annual revenue.
Once complete, the new entity will join 3M's health care business, which generated $5.8 billion in 2017 sales and $1.7 billion in operating profits. The deal first must be approved by regulators, but is expected to close by mid 2019.
"This acquisition builds on our strategic commitment to invest in our Health Information Systems business and expands the capabilities of our revenue cycle management and population health priority growth platform," said 3M Health Care Executive Vice President Mike Vale in a statement. "Together, we will enable doctors to improve the patient experience, while enhancing documentation accuracy and operational efficiency for both providers and payers."
M(ASTERISK)Modal President Michael Finke said in a statement that he was excited about the deal. "By combining capabilities, we can more quickly deliver on our mission of bringing conversational artificial intelligence and ambient intelligence directly into clinical workflows. This is a great outcome for our clients, partners and team."
3M said it will maintain a strategic business relationship with M(ASTERISK)Modal's remaining transcription, scribing and coding services business that are not part of the acquisition.
The deal will further bulk up 3M's healthcare division. 3M's existing Health Information Systems business works with 8,000 healthcare payer and provider organizations that deliver various software and services, including the ability to combine clinical documentation systems and risk assessment methods that capture and analyze patient information.
3M officials announced that the deal is expected to dilute earnings by about 10 cents a share in the first 12 months following the completion of the transaction.
