Solventum plans to spin off $1.4 billion health software unit within 18 months

Solventum plans to separate its Health Information Systems business, a $1.4 billion healthcare software unit, as the company sharpens its focus on medical and dental products. The announcement, made on August 5, 2026, is the latest step in a three-phase transformation strategy aimed at creating a more dedicated MedTech company. The separation, which Solventum targets completing within 12 to 18 months, will be structured to maximize shareholder value, the company said.

It is evaluating a range of options, including an independent public company, a combination with a larger player, or another transaction. No final decision has been made, and there is no assurance a separation will occur, Solventum cautioned. Morgan Stanley and Goldman Sachs are financial advisors, with Cleary Gottlieb Steen & Hamilton as legal counsel.

Health Information Systems, which generated $1.4 billion in net sales for the twelve months ended December 31, 2025, provides revenue cycle management, performance management, and clinician productivity software. Its solutions are used by more than 75% of U.S. hospitals and deployed across over 30 countries, processing approximately 660 million clinical documents monthly. The unit operates in a roughly $10 billion addressable market growing 5–6% annually.

"We have moved with urgency to advance portfolio optimization, a core pillar of our transformation strategy," Hanson said in a statement. "Health Information Systems is a differentiated business with a strong position and significant potential. We believe separation can unlock value by enabling both businesses to pursue distinct growth agendas, accelerate innovation and realize their full potential." By shedding the software unit, Solventum aims to invest behind its highest-priority growth opportunities and accelerate innovation.

For Health Information Systems, independence would bring added strategic focus, operational agility, and capital allocation flexibility, Solventum believes, allowing it to expand autonomous coding adoption, enter international markets undergoing payment modernization, and pursue targeted acquisitions. The company hosted a conference call for investors at 4:30 p.m. Eastern Time on August 5 to discuss the results and the proposed separation. Solventum, which was spun off from 3M in the first half of 2024, has been navigating a challenging healthcare landscape.

Earlier this year, on March 29, 2026, the company disclosed a data breach in which an unauthorized party accessed limited systems and data related to some customers and their patients. A threat actor known as SeraphimGroup claimed responsibility in April. The types of information exposed included names, addresses, dates of birth, medical record numbers, and medical histories, though the total number of affected individuals has not been publicly disclosed.

Bryan Hanson, chief executive officer of Solventum, said the move reflects urgency in portfolio optimization. The separation is designed to transform Solventum into a pure-play MedTech company centered on its MedSurg and Dental Solutions businesses.