GE sells health finance unit to Capital One for $9 billion

The conglomerate had said in April that it was selling the bulk of GE Capital, the giant finance business that had long accounted for about half of its profit.

The Healthcare Financial Services unit provides loans and mortgages to companies which also include nursing homes, living facilities and medical practices. As of December 31, 2012, the Company’s principal subsidiaries included Capital One Bank (USA), National Association (COBN), which offers credit and debit card products, other lending products and deposit products, and Capital One, National Association (CONA), which offers a spectrum of banking products and financial services to consumers, small businesses and commercial clients.

Tuesday’s deal builds on GE’s agreements last quarter to unload $23 billion of financial businesses, including the U.S. private-equity lending business sold to Canada Pension Plan Investment Board. The transaction is expected to close in the fourth quarter this year, subject to regulatory approvals.

GE additionally stated it had signed an settlement with one other purchaser to sell about $ 600 million of HFS actual-property fairness investments.

In related news, insider Kevin S. Borgmann sold 1,811 shares of Capital One Financial Corp. stock in a transaction dated Tuesday, July 21st. Deutsche Bank reiterated a “buy” rating and set a $92.00 price target on shares of Capital One Financial Corp.in a research note on Thursday. “This addition will catapult us to a leading market position in providing financial services to the healthcare sector”, Michael Slocum, President of Capital One’s Commercial Bank.

The ultimate goal is to reduce GE Capital’s ending net investment, or GE’s measure of assets, by $200 billion by the end of next year. Capital One also acquired the online banking business of ING Groep NV for about $9 billion in 2011. With this transaction, the total for announced sales is approximately $78 billion. Darren Alcus, president and CEO of HFS, will join Capital One.

GE said it will hold onto financing businesses that relate to its industrial operations, including a unit that provides health-care equipment financing to customers of the business that is being sold. Citigroup Global Markets Inc. and J.P. Morgan Securities LLC provided financial advice to GE and Hogan Lovells US LLP provided legal advice.

Capital One stock is up 0.69% to $81.43 in after-hours trading this afternoon. The company’s 50-day moving average is $86.40 and its 200-day moving average is $82.34.

GE has struck a number of major deals recently. The stock was sold at an average price of $91.42, for a total value of $165,561.62.