3M (NYSE: MMM) is revisiting a potential divestiture of Health Information Systems, its health care revenue cycle management and software arm, sources tell Axios.
Why it matters: HIS is a large, profitable and high-quality RCM business, and should arguably be valued at a higher multiple than the conglomerate that it sits under. That said, the future growth opportunity as, hypothetically, a standalone business, is not clear.
What's happening: Goldman Sachs is advising on the evaluation of a carve-out of the health care IT division, again.
Flashback: 3M tapped Goldman in 2015 to explore strategic alternatives for the unit, including a spinoff or sale.
Zoom in: HIS generated $300 million in sales in Q1 2022, up from $289 million in Q1 2021, 3M reported Tuesday morning.
What they’re saying: While 3M could hypothetically pursue a public spinoff on a tax-free basis, “even great companies like Ensemble” didn’t tap the public equity markets despite the strong recent performance, one source notes.
3M and Goldman declined to comment.
