Capital One will take over the healthcare finance arm of GE Capital in a $9 billion deal, the financial firm announced Tuesday night, turning a company known best for its "what's in your wallet" credit card business into a powerhouse in the healthcare lending sphere.
Under terms of the deal, Capital One will take on $8.5 billion in existing healthcare-related loans held by GE. The deal is expected to close in the fourth quarter.
Darren Alcus, president of the GE division, will join Capital One as president of the healthcare finance business.
"This is a strategic investment in a specialty industry segment that we have been building out for the past several years," Michael Slocum, president of Capital One's Commercial Bank, said in the announcement. "This addition will catapult us to a leading market position in providing financial services to the healthcare sector."
The move is part of GE's plan to sell off its finance business and divest $100 billion in financial assets, to focus more on its manufacturing arm. With this deal, GE has divested of $78 billion of that total.
GE's healthcare lending division historically gave out direct or real estate loans to support deals in healthcare services, senior housing, hospitals, medical offices, pharmaceuticals and medical devices.