Global Payments divests medical software unit for $1.1 bln to sharpen core focus
Adds deal value in headline and paragraph 1, analyst comment in paragraphs 4-5, context throughout
By Niket Nishant
Oct 30 (Reuters) -Global Payments GPN.N will sell its medical software business, AdvancedMD, to investment firm Francisco Partners for $1.13 billion, they said on Wednesday, as the financial technology firm looks to slim down and focus on core operations.
The payments technology provider has pledged to streamline operations and divest assets not central to its businesses, with plans to allocate some of the proceeds to enhance shareholder returns.
Global Payments also unveiled a $600 million accelerated stock buyback plan on Wednesday.
"We didn't consider AdvancedMD a priority asset for Global Payments to sell as we thought stickiness and payment monetization made it worth keeping," said J.P.Morgan analyst Tien-tsin Huang.
But the sale will help "simplify the business around core payment processing," Huang said.
Founded in 1999, AdvancedMD provides payments and other software services to independent physicians and small-to-medium sized healthcare facilities in the United States.
Global Payments had acquired AdvancedMD in a $700 million deal in 2018. Francisco was also an investor in the company years ago.
The investment firm has bought healthcare analytics and medical services units from CVS Health CVS.N, IBM IBM.N and Qualcomm QCOM.O over the past few years.
The deal for AdvancedMD is expected to close in the fourth quarter. Moelis & Company was the financial adviser to Francisco, while Bank of America advised Global Payments.
Separately in the day, Global Payments reported a near 13% drop in its third-quarter profit due to higher costs.
Shares of the company were down nearly 3% before the bell.
Reporting by Niket Nishant in Bengaluru; Editing by Shilpi Majumdar
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