We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
SOLV Plans Health Information Systems Business Spinoff to Drive Growth
Read MoreHide Full Article
Key Takeaways
Solventum plans to separate HIS to focus more sharply on its MedSurg and Dental Solutions businesses.
HIS generates $1.4B in annual sales and serves more than 75% of U.S. hospitals.
Solventum aims to complete the HIS separation within 12-18 months, subject to approvals and conditions.
Solventum (SOLV - Free Report) plans to separate its Health Information Systems (HIS) business as part of its portfolio optimization strategy. The move is expected to sharpen the company’s focus on its core MedSurg and Dental Solutions businesses while allowing HIS to pursue its growth opportunities as a standalone entity.
From an investor perspective, the planned separation could unlock shareholder value by creating a more focused MedTech business and enabling targeted capital allocation toward Solventum’s higher-priority growth areas.
HIS, which generates $1.4 billion in annual sales and serves more than 75% of U.S. hospitals, could also benefit from greater strategic and financial flexibility. However, execution, regulatory approvals and uncertainty around the ultimate transaction structure remain key factors to watch.
Likely Trend of SOLV Stock Following the News
Shares of SOLV have gained almost 3% since the announcement of the news. In the year-to-date period, shares of the company have gained 9.1% compared with the industry’s 1.3% growth. The S&P 500 increased 12.8% in the same time frame.
The HIS business separation is likely to benefit Solventum’s long-term business by allowing it to operate as a more focused MedTech company centered on its MedSurg and Dental Solutions businesses. A streamlined portfolio should enable management to allocate capital more effectively toward higher-priority growth opportunities, accelerate innovation and improve commercial execution.
Meanwhile, separating HIS could reduce portfolio complexity and give Solventum greater flexibility to strengthen margins, enhance returns on invested capital and pursue strategic investments in its core businesses, potentially supporting a more sustainable growth profile over the long term.
SOLV currently has a market capitalization of $14.52 billion.
More on the News
Solventum’s planned separation of HIS marks the latest step in its three-phase transformation strategy and portfolio optimization efforts. The company expects the move to establish Solventum as a more focused MedTech player, with greater emphasis on its MedSurg and Dental Solutions businesses. HIS is a scaled healthcare software business with $1.4 billion in annual sales and operations across more than 30 countries. Its solutions are used by more than 75% of U.S. hospitals, supported by more than 40 years of medical coding expertise.
The business processes approximately 660 million clinical documents each month and provides revenue cycle management, performance management and clinician productivity solutions through long-term contracts and deeply embedded workflows. Operating in an estimated $10 billion addressable market growing 5-6% annually, HIS also benefits from proprietary technology, extensive data assets and AI-driven autonomous coding capabilities. As a standalone business, Solventum believes HIS could gain greater strategic focus, operational agility and capital allocation flexibility to expand autonomous coding adoption, enter international markets undergoing payment system modernization and pursue strategic partnerships and acquisitions.
The company aims to complete the separation within 12 to 18 months, although no final decision has been made regarding the structure or timing. Any potential transaction remains subject to approval by Solventum’s board of directors, regulatory requirements and other customary closing conditions. The company has also cautioned that there is no assurance that the separation will ultimately be completed and plans to provide updates as the process progresses.
Solventum continues to make progress across all three phases of its transformation strategy, namely stabilizing and separating the business, repositioning it for profitable growth and optimizing the portfolio. The company is nearing completion of its separation from 3M, with nearly 70% of roughly 200 transition service agreements exited and about 950 of 1,200 systems migrated. Management expects to exit 90% of the agreements by year-end 2026, which should reduce complexity, free resources for growth initiatives and support margin expansion and free cash flow improvement.
The company continues to pursue disciplined tuck-in M&A, with Acera delivering more than 40% year-over-year revenue growth and gross margin above 80%. At the same time, Solventum is aligning innovation and commercial resources around five growth drivers that represent a multibillion-dollar opportunity, while expecting nearly 20 new product launches through the first quarter of 2028.
Management expects these initiatives to support stronger organic growth, margin expansion and shareholder value creation as the transformation progresses.
Recent Development by SOLV
Recently, Solventum delivered a strong second-quarter 2026, with earnings and revenues surpassing the Zacks Consensus Estimate. Performance benefited from healthy demand, new product launches and stronger commercial execution across all three segments. MedSurg gained from negative pressure wound therapy and antimicrobial IV-site management products. Dental Solutions benefited from restorative and aesthetics offerings, while HIS maintained momentum in revenue cycle management.
However, the reported growth rate was aided by approximately $125 million of advance orders ahead of ERP cutovers.
SOLV’s Zacks Rank & Key Picks
Currently, SOLV carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are McKesson (MCK - Free Report) , Phibro Animal Health (PAHC - Free Report) andCardinal Health (CAH - Free Report) .
McKesson carries a Zacks Rank #2 (Buy) at present and has an estimated long-term growth rate of 13.7%. MCK’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.09%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
McKessonshares have gained 8.8% against the industry’s 12.7% decline in the year-to-date period.
Phibro Animal Health, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 21.5%. PAHC’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 16.25%.
Phibro Animal Health stock has climbed 44.2% against the industry’s 17.1% decline in the year-to-date period.
Cardinal Health, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 17%. CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 10.27%.
Cardinal Health’s shares have lost 2.6% compared with the industry’s 3.1% decline in the year-to-date period.
View the Zacks #1 Rank List
Image: Bigstock
SOLV Plans Health Information Systems Business Spinoff to Drive Growth
Key Takeaways
Solventum (SOLV - Free Report) plans to separate its Health Information Systems (HIS) business as part of its portfolio optimization strategy. The move is expected to sharpen the company’s focus on its core MedSurg and Dental Solutions businesses while allowing HIS to pursue its growth opportunities as a standalone entity.
From an investor perspective, the planned separation could unlock shareholder value by creating a more focused MedTech business and enabling targeted capital allocation toward Solventum’s higher-priority growth areas.
HIS, which generates $1.4 billion in annual sales and serves more than 75% of U.S. hospitals, could also benefit from greater strategic and financial flexibility. However, execution, regulatory approvals and uncertainty around the ultimate transaction structure remain key factors to watch.
Likely Trend of SOLV Stock Following the News
Shares of SOLV have gained almost 3% since the announcement of the news. In the year-to-date period, shares of the company have gained 9.1% compared with the industry’s 1.3% growth. The S&P 500 increased 12.8% in the same time frame.
The HIS business separation is likely to benefit Solventum’s long-term business by allowing it to operate as a more focused MedTech company centered on its MedSurg and Dental Solutions businesses. A streamlined portfolio should enable management to allocate capital more effectively toward higher-priority growth opportunities, accelerate innovation and improve commercial execution.
Meanwhile, separating HIS could reduce portfolio complexity and give Solventum greater flexibility to strengthen margins, enhance returns on invested capital and pursue strategic investments in its core businesses, potentially supporting a more sustainable growth profile over the long term.
SOLV currently has a market capitalization of $14.52 billion.
More on the News
Solventum’s planned separation of HIS marks the latest step in its three-phase transformation strategy and portfolio optimization efforts. The company expects the move to establish Solventum as a more focused MedTech player, with greater emphasis on its MedSurg and Dental Solutions businesses. HIS is a scaled healthcare software business with $1.4 billion in annual sales and operations across more than 30 countries. Its solutions are used by more than 75% of U.S. hospitals, supported by more than 40 years of medical coding expertise.
The business processes approximately 660 million clinical documents each month and provides revenue cycle management, performance management and clinician productivity solutions through long-term contracts and deeply embedded workflows. Operating in an estimated $10 billion addressable market growing 5-6% annually, HIS also benefits from proprietary technology, extensive data assets and AI-driven autonomous coding capabilities. As a standalone business, Solventum believes HIS could gain greater strategic focus, operational agility and capital allocation flexibility to expand autonomous coding adoption, enter international markets undergoing payment system modernization and pursue strategic partnerships and acquisitions.
The company aims to complete the separation within 12 to 18 months, although no final decision has been made regarding the structure or timing. Any potential transaction remains subject to approval by Solventum’s board of directors, regulatory requirements and other customary closing conditions. The company has also cautioned that there is no assurance that the separation will ultimately be completed and plans to provide updates as the process progresses.
Image Source: Zacks Investment Research
Solventum Advances Three-Phase Transformation Strategy
Solventum continues to make progress across all three phases of its transformation strategy, namely stabilizing and separating the business, repositioning it for profitable growth and optimizing the portfolio. The company is nearing completion of its separation from 3M, with nearly 70% of roughly 200 transition service agreements exited and about 950 of 1,200 systems migrated. Management expects to exit 90% of the agreements by year-end 2026, which should reduce complexity, free resources for growth initiatives and support margin expansion and free cash flow improvement.
The company continues to pursue disciplined tuck-in M&A, with Acera delivering more than 40% year-over-year revenue growth and gross margin above 80%. At the same time, Solventum is aligning innovation and commercial resources around five growth drivers that represent a multibillion-dollar opportunity, while expecting nearly 20 new product launches through the first quarter of 2028.
Management expects these initiatives to support stronger organic growth, margin expansion and shareholder value creation as the transformation progresses.
Recent Development by SOLV
Recently, Solventum delivered a strong second-quarter 2026, with earnings and revenues surpassing the Zacks Consensus Estimate. Performance benefited from healthy demand, new product launches and stronger commercial execution across all three segments. MedSurg gained from negative pressure wound therapy and antimicrobial IV-site management products. Dental Solutions benefited from restorative and aesthetics offerings, while HIS maintained momentum in revenue cycle management.
However, the reported growth rate was aided by approximately $125 million of advance orders ahead of ERP cutovers.
SOLV’s Zacks Rank & Key Picks
Currently, SOLV carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are McKesson (MCK - Free Report) , Phibro Animal Health (PAHC - Free Report) andCardinal Health (CAH - Free Report) .
McKesson carries a Zacks Rank #2 (Buy) at present and has an estimated long-term growth rate of 13.7%. MCK’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 3.09%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
McKessonshares have gained 8.8% against the industry’s 12.7% decline in the year-to-date period.
Phibro Animal Health, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 21.5%. PAHC’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 16.25%.
Phibro Animal Health stock has climbed 44.2% against the industry’s 17.1% decline in the year-to-date period.
Cardinal Health, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 17%. CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 10.27%.
Cardinal Health’s shares have lost 2.6% compared with the industry’s 3.1% decline in the year-to-date period.