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Recently, GE Healthcare announced the launch of a secondary underwritten public offering of 13 million shares of common stock, priced at $82.25 per share, which is equivalent to $80.605 per share after deducting underwriting discounts.At a price of $82.25 per share, the total value of the shares issued in this offering reached nearly $1.07 billion, equivalent to approximately RMB 7.7 billion.

It is understood that the targeted sale of shares in this stock issuance is to Morgan Stanley, in exchange for the GE Healthcare debt held by the company.The press release shows that, after the debt-to-equity swap transaction is completed, as the selling shareholder of this issuance,Morgan Stanley intends to sell "GEHC" shares to underwriters in this offering. The offering is expected to close on February 21, 2024, subject to customary closing conditions.

From the secondary market perspective, GE Healthcare's stock began to rise significantly starting from February 1, 2024. On February 16, the day the debt-to-equity conversion news was announced, GE Healthcare's intraday share price reached a near six-month high of $87.29 per share. By the close of trading that day, the increase was 0.46%, with a closing price of $86.02 per share.

GE Healthcare is a global leading medical device giant dedicated to making hospital operations more efficient, clinical diagnoses more effective, treatments more precise, and patients healthier and happier by providing integrated solutions, services, and data analysis. Its businesses in medical imaging, ultrasound, life care, and diagnostic pharmaceuticals cover all aspects of healthcare from diagnosis, treatment to monitoring. The company operates in more than 160 countries and regions, with an annual revenue exceeding 18.3 billion US dollars and over 50,000 employees worldwide.

On January 4, 2023, GE Healthcare was listed on the Nasdaq as an independent company under the stock code "GEHC".At the end of the first trading day, GE Healthcare achieved a 7.79% increase, closing at $60.36, with a real-time market value as high as $27.45 billion (approximately 189 billion yuan).

Issuance of 13 Million Ordinary Shares

More than a year later, GE Healthcare announces launchSecondary Underwriting Public Offering of 13 Million Ordinary Shares, with each share priced at $82.25, or $80.605 per share after deducting underwriting discounts. At the price of $82.25 per share, the total value of this issuance reached nearly $1.07 billion, equivalent to approximately 7.7 billion yuan. GE Healthcare stated that during this issuance process, the company will not sell any common shares, nor will it receive any proceeds from the sale of "GEHC shares" or debt-to-equity transactions.

Currently, GE Healthcare has submitted a registration statement on Form S-3 (including a prospectus) to the U.S. Securities and Exchange Commission (hereinafter referred to as the "SEC"), which became effective upon filing.

Prior to the completion of the offering, GE Healthcare expects to exchange "GEHC stock" for GE Healthcare debt held by Morgan Stanley Senior Funding, Inc. and Morgan Stanley Bank. Morgan Stanley is the designated selling shareholder in this offering.

"Morgan Stanley" to Sell GE Healthcare Shares Worth Nearly $1.07 Billion

Morgan Stanley, BofA Securities, Citigroup, Evercore ISI, Goldman Sachs, and JPMorgan will act as the lead joint bookrunners for this offering. BNP Paribas, Crédit Agricole CIB, HSBC, SMBC Nikko, and Société Générale are also serving as joint bookrunners for the offering.This offering is expected to close on or about February 21, 2024, subject to customary closing conditions.

It should be noted that, after the completion of the debt-to-equity swap transaction, as the selling shareholder of this offering, Morgan Stanley Venture Partners intends to sell GE Healthcare stocks to the underwriters in this offering.In other words, Morgan Stanley will sell GE Healthcare shares with a total equity value of nearly US$1.07 billion, equivalent to approximately RMB 7.7 billion.It has granted the underwriters an option to purchase additional common shares of GE Healthcare at the public offering price minus the 30-day underwriting discount.

On February 6, 2024, GE Healthcare, a global leading medical device company, announced its full-year 2023 financial results and the financial report for the fourth quarter ended December 31, 2023.

The report shows,In 2023, GE Healthcare achieved revenues of $19.6 billion, representing a 7% increase year-over-year, with organic growth of 8%. Growth was realized across all segments and regions.The total price-to-book ratio is 1.03 times, with total orders increasing by 3% year-on-year.

In the fourth quarter of 2023, GE Healthcare achieved revenue of $5.2 billion, a year-on-year increase of 5%.

Imaging Business

Imaging revenue was $2.8 billion, up 4% year-over-year. EBIT (Earnings Before Interest and Taxes) was $337 million compared to $321 million in the prior year; EBIT margin was 11.9% versus 11.8% last year.

Ultrasound Business

Ultrasound Business Revenue was $944 million, a year-over-year decrease of 1%. EBIT (Earnings Before Interest and Taxes) was $244 million, compared to $285 million in the same period last year. EBIT margin was 25.8%, versus 29.8% last year.

Patient Care Solutions

Patient Care Solutions revenue was $827 million, up 5% year-over-year. EBIT (Earnings Before Interest and Taxes) was $110 million, compared to $130 million in the same period last year. EBIT margin was 13.3%, versus 16.5% last year.

Pharmaceutical Diagnostics Business

Pharmaceutical Diagnostics revenue was $591 million, up 25% year-over-year. EBIT (Earnings Before Interest and Taxes) was $144 million, compared to $109 million in the same period last year. EBIT margin was 24.4%, compared to 23.0% in the same period last year.

GE Healthcare President and CEO Peter Arduini said, "As we close out our first year as a standalone public company, I am pleased to announce strong fourth-quarter and full-year results. This robust financial performance is a testament to the dedication of our team and the successful execution of our precision health strategy."We have made significant progress, including investing over $1 billion in R&D for future growth, which helped drive more than 40 innovations in 2023. We have strengthened our market position through strategic acquisitions while repaying $1 billion in debt, laying a solid foundation for continued growth."Against the backdrop of improved capital prospects, we are confident about entering 2024."

Full-Year 2024 Guidance

In response, GE Healthcare also announced its full-year guidance for 2024, including organic revenue growth of approximately 4%. The adjusted EBIT margin is expected to be between 15.6% and 15.9%, representing an increase of 50 to 80 basis points compared to the adjusted EBIT margin of 15.1% in 2023. The adjusted effective tax rate (ETR) is projected to be between 23% and 25%. Adjusted earnings per share are expected to be in the range of $4.20 to $4.35, reflecting a growth of 7% to 11% compared to the adjusted earnings per share of $3.93 in 2023.

As one of the largest medical imaging manufacturers globally, GE Healthcare continuously expands its layout and business areas while consolidating its market position through mergers, acquisitions, and collaborations. In particular, it is increasing investment in the fields of imaging and artificial intelligence.

Acquisition of MIM Software

Including in January 2024, the announcement of plans to acquire MIM Software, a provider of artificial intelligence and medical imaging analysis.GE Healthcare Reveals It Will Use Cash on Hand to Pay for This Acquisition; As of the Third Fiscal Quarter of 2023, the Company Had Free Cash Flow of $570 Million (Approximately RMB 4.08 Billion). Based on This, the Transaction Amount Is Expected Not to Exceed $570 Million.

Data shows that MIM Software was founded in 2003, with its headquarters located in Cleveland, USA. It focuses on providing AI-based software, covering multiple medical fields such as radiation oncology, molecular radiotherapy, diagnostic imaging, and urology. The company’s products are widely used in imaging centers, hospitals, specialized clinics, and research institutions worldwide.

GE Healthcare plans to integrate MIM Software's innovative solutions into its advanced visualization products.To promote the application of digital technologies, such as AI-based lesion segmentation and target delineation, and dose analysis in radiotherapy, at every stage of disease diagnosis and treatment—especially in the rapidly growing fields of radiology imaging, nuclear medicine molecular imaging, and radiation oncology.

Invest in Laza Medical

In December 2023, GE Healthcare participated in the $36 million (approximately RMB 236 million) Series A financing of Laza Medical, a subsidiary of well-known medical incubator Shifamed. It is reported that Laza Medical is developing a cardiac interventional imaging solution supported by AI and state-of-the-art robotic technology.

Collaboration with Sectra

November 2023, withInternational medical imaging IT giant Sectra has reached a cooperation agreement, and both parties will work together to achieve seamless integration of the products from the two companies.To provide more efficient medical imaging diagnostic solutions.

According to the agreement,Sectra will integrate its developed radiology imaging solutions into GE Healthcare's AW Family advanced visualization applications.This integration will cover every aspect from coordination and diagnosis to report generation and results distribution, in support of clinical physicians.Precision care solutions required at every step of the nursing pathway enhance work efficiency, save time, and reduce the workload of healthcare professionals.

Strategic Cooperation Reached with Atomic High-Tech

In the Chinese market, GE Healthcare China announced a strategic partnership with Atom High-Tech, a subsidiary of China Isotope & Radiation Corporation, in February 2024.Both parties will pool their efforts to launch innovative cooperation in the field of nuclear medicine diagnostic drugs, jointly promoting the high-quality development of the nuclear medicine industry and accelerating the implementation of precision medicine based on nuclear medicine innovation. This also marks another significant milestone in GE Healthcare's China strategy of "comprehensive localization, limitless innovation, and win-win cooperation."

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As a global leading medical device enterprise, GE HealthcareIn recent years, by integrating their respective strengths, they have redefined the standard of patient care, bringing positive impacts to healthcare providers and patients. Since its independent listing, the company has also achieved strong growth in 2023 with a brand-new status. This offering of 13 million ordinary shares, aimed at resolving debt, may further enable the company to move forward unburdened and accelerate its development. So, who will end up purchasing the nearly $1.07 billion worth of stock being sold by "Morgan Stanley"? In this regard, DeviceHome will continue to follow closely.

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