Health IT

Nokia ends a digital health misadventure with sale of business back to Withings cofounder

Two years after Nokia decided to acquire Withings for $192.3 million to grow a digital health business, it has sold the company back to Withings cofounder and chairman Éric Carreel.

Withings digital health products including smartwatches, smart thermometer, Bluetooth enabled scale and blood pressure cuff.

Two years after Nokia decided to acquire Withings for $192.3 million to grow a digital health business, it has sold the company back to Withings cofounder and chairman Éric Carreel. The move follows a strategic review in February and illustrates some of the pitfalls with growth by acquisition, particularly for a company that was relatively new to digital health and has had a steady stream of layoffs in recent years.

Although Nokia had sought to integrate Withings business with Nokia Technologies’ preventive health and patient care teams, digital health accounted for a very small portion of the company’s revenues. Last year,  Nokia announced a write-down of $164 million on the assets from the deal, The Verge noted, suggesting they had paid too much for the business.

When the strategic review was disclosed, Nokia made it clear it was considering all options for the digital health business, which is part of Nokia Technologies. Those options included a transaction. It also became clear that the consumer digital health assets Nokia got from the acquisition, such as the Bluetooth-enabled blood pressure cuffs, scales, thermometer and activity trackers, were no longer a good fit for a company that has shifted to a business to business and licensing focus.

The unusual deal for the digital health business, which is expected to close by the end of the second quarter this year, spurred some discussion on Twitter as to whether the transaction should have been anticipated and what could happen next with the Withings brand.

Withings was founded in 2008 and Eric Carreel served as chairman. With Careel taking over the digital health business once more, it will be interesting to see what direction he will take the company.

 

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