IBM will sell its Watson Health business to global investment firm Francisco Partners.

The transaction is expected to close in the second quarter of 2022 and is subject to customary regulatory clearances. Financial terms of the transaction were not disclosed, but Bloomberg reports a price tag of over $1 billion.

Francisco Partners will acquire the healthcare data and analytics assets from the division, including Health Insights, MarketScan, Clinical Development, Social Program Management, Micromedex, and imaging software offerings.

“Today’s agreement with Francisco Partners is a clear next step as IBM becomes even more focused on our platform-based hybrid cloud and AI strategy,” said Tom Rosamilia, senior vice president, IBM Software.

“IBM remains committed to Watson, our broader AI business, and to the clients and partners we support in healthcare IT. Through this transaction, Francisco Partners acquires data and analytics assets that will benefit from the enhanced investment and expertise of a healthcare industry-focused portfolio.”

Watson Health was once described by IBM as an ambitious 'moonshot' project that would use artificial intelligence to transform the healthcare sector. Launched in 2015, IBM spent more than $4bn in acquisitions to grow the division, but never turned a profit.

After an initial splashy launch, the division soon struggled. A 2017 investigation by healthcare publication Stat found that Watson Health had interoperability challenges, required extensive human imput, and wasn't ready for launch. Another investigation in 2021 said that the division had fallen apart.

“We have followed IBM’s journey in healthcare data and analytics for a number of years and have a deep appreciation for its portfolio of innovative healthcare products,” said Ezra Perlman, co-president at Francisco Partners.

“IBM built a market-leading team and provides its customers with mission-critical products and outstanding service.”