General Electric is on the lookout for a buyer for the key cogs to its digital business, GE Digital. It has hired an investment bank to orchestrate the auction, the Wall Street Journal reported, citing people familiar with the matter.
Attempts to sell its digital assets come as part of a wider “corporate meltdown” over the last 18 months.
GE Digital, headquartered in San Ramon, Calif., was central to the strategy of former CEO Jeff Immelt, who retired last summer and was replaced by John Flannery. GE Digital was intended to help divert the company from financial and media assets and strengthen the performance of its stock.
GE Digital was established as a standalone unit in 2015 to distinguish it from the company’s industrial divisions. A new software platform called Predix was at the heart of the activity, designed to help industrial customers such as airlines gather and analyze data to better manage their equipment and identify new and efficient strategies. However, the digital arm’s subsequent technical issues and weakening sales have added to the company’s woes.
Exact details on what is for sale and the amount of money the potential deal could generate have not been released. What is clear however, says the WSJ, is that GE has poured billions of dollars into its inception.
Those touted as possible buyers include software companies and other industrial players seeking to become more digital-focused.
It remains to be seen how the industrial company will fare without its software support. The move comes as a surprise despite the heavy restructuring of the company throughout 2018. Flannery told the New York Times just last month that GE Digital was set to break even by 2020.
Concerned onlookers flag up cash constraints and falling profits at GE’s large power business. However, others claim that GE (ge) is getting its debt under control, and that by ridding itself of some of its assets and breaking up its former structure, it could be set to unlock value for its shareholders.