GE Healthcare’s $2.3 Billion Takeover Is a Bold Growth Play. Here’s Why.

Coming into Friday trading, GE Healthcare stock was down about 4% year to date and down 12% over the past 12 months. (AFP via Getty Images)

Key Points

• GE Healthcare Technologies will acquire Intelerad, a medical imaging software provider, for $2.3 billion in cash, with the deal closing in the first half of 2026.
• The acquisition is expected to broaden GE Healthcare’s customer reach, accelerate its shift to a SaaS model, and increase recurring revenue.
• The deal is projected to be immediately accretive to top-line growth and adjusted operating profit margin, but slightly dilutive to adjusted earnings per share in the short term.

GE Healthcare Technologies is trying to kick-start growth, which should please investors.

The medical imaging and diagnostic company announced on Thursday an agreement to acquire Intelerad, a medical imaging software provider with a presence in outpatient ambulatory care, for $2.3 billion in cash.

The deal should close in the first half of 2026.

The deal complements GE HealthCare’s inpatient footprint. “The combined business will broaden customer reach and [deliver] a comprehensive, integrated imaging solution across multiple care settings,” said the company in a news release. “In addition, Intelerad’s business model accelerates GE HealthCare’s shift towards a [software as a service], SaaS, model and significantly increases recurring revenue.”

It is GE Healthcare’s first acquisition since its separation from GE in January 2023, pointed out Citi analyst Joanne Wuensch in a Thursday report. “The transaction will be immediately accretive to top-line growth and adjusted [operating profit] margin, though slightly dilutive to adjusted earnings per share in the short term,” she said. Wuensch rates GE Healthcare stock Hold and has an $83 price target for shares.

Revenue in the first full year of ownership should be about $270 million, said the company. Earnings before interest, taxes, depreciation, and amortization, or Ebitda, margins are “in excess of 30%.” GE Healthcare is expected to produce a 2025 Ebitda margin of almost 18% from sales of about $20.5 billion.

Investors don’t seem to mind the dilution. Shares rose 2.3% on Friday, closing at $76.45, while the S&P 500 and Dow Jones Industrial Average gained 1% and 1.1%, respectively. Friday’s gain for GE Healthcare stock followed a 3.4% jump on Thursday.

Coming into Friday trading, GE Healthcare’s stock was down 4% so far this year and down 12% over the past 12 months.

Tariffs and trade concerns have weighed on investor sentiment and on Wall Street’s forecasts of profits. GE Healthcare is expected to make about $4.55 per share in 2025. That estimate was closer to $4.70 a year ago.

GE Healthcare earned about $4.50 in 2024, so earnings growth has been slow lately.

Write to Al Root at allen.root@dowjones.com