IBM Watson Acquires Truven Health Analytics For $2.6 Billion

10-17-2013 8-01-10 PM

IBM announces that it will acquire Truven Health Analytics for $2.6 billion. Truven was previously owned by Veritas Capital, a private equity firm that acquired the company from Thomson Reuters in 2012 for $1.25 billion, renaming it Truven Health Analytics in the process. The deal will bring IBM new health-focused datasets, a staff of data scientists with healthcare experience, and 8,500 clients, including hospitals, health plans, employers, and life sciences companies. The acquisition marks the IBM Watson business unit’s fourth major acquisition since its 2015 formation. IBM has so far acquired Phytel, a population health management software vendor; Explorys, a health-focused data analytics vendor; Merge Healthcare, a medical imaging vendor; and now Truven. After the current deal closes, IBM will have spent over $4 billion seeding its Watson business unit with acquired companies.

IBM has largely approached its Watson project as one that it intends to build from the ground up. Engineers have been working on the analytical capabilities of the Watson supercomputer since work began on the project in 2007. In recent years, IBM has worked to find a home for Watson in a number of industries, but healthcare remains its primary focus. The technology became the underpinning of an entire business unit, and dozens of multi-year partnerships with prestigious hospitals were soon announced. These deals brought engineers together with clinicians to expose Watson to more medical data, and to train it to interpret the data correctly.

Now, IBM appears to be using acquisitions to add more data to the Watson supercomputer. With its acquisition of Merge, IBM gained access to massive datasets of medical images and radiology notes. Truven will bring extensive datasets spanning “types cost, claims, quality and outcomes information.” IBM will integrate these new datasets into its existing Watson product offerings. The company notes that in addition to data, Truven was a compelling acquisition because it had a staff of data scientists with healthcare experience that could analyze the disparate datasets and draw out insightful trends. Truven also comes with an extensive list of clients that Watson should be able to leverage to land executive meetings for its Watson sales team.

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