Nokia to sell its health division to Eric Carreel, co-founder of Withings, after talks with Nest and more
Nokia’s unsuccessful foray into digital health hardware and services looks like it is finally coming to an end. Today the company announced that it has entered into exclusive negotiations to sell the division to Eric Carreel, the co-founder and former chairman of Withings, after both Samsung and Google both reportedly also sniffed around. Withings formed the core of the division after Nokia acquired the French startup in 2016 for €170 million.
“Nokia announced a review of strategic options for the Digital Health business in February 2018. The planned sale is part of Nokia’s honed focus on becoming a business-to-business and licensing company,” the announcement said. The transaction is subject to terms agreed in the negotiations and completion of the information consultation with the Works Council of Nokia Technologies (France) SA., with the deal expected to close in late Q2 2018. Nokia’s licensing business is not included.
A Nokia spokesperson confirmed that the company is not disclosing any price at the moment. But as a measure of how small the business — which included smart scales, a heart and activity monitor and a smart thermometer — was for Nokia, and what kind of price multiple we might expect, last year, the digital health division pulled in a mere €52 million of revenues, while the rest of the company posted sales €23.2 billion.
The announcement today comes after months of speculation about the future of the business after a proposed layoffs and a leaked memo that admitted that the health operation was struggling and could see no way ahead to improve things, and announcing to staff that the company was starting a strategic review of the business.
“…Rather than only falling in love with our technology, we must be honest with ourselves,” the memo from Nokia’s chief strategy officer Kathrin Buvac said. “In its entirety, our Digital Health business has struggled to scale and meet its growth expectations. Currently, we don’t see a path for it to become a meaningful part of a company as large as Nokia.”
Those reportedly interested in acquiring the company included Google division Nest and Samsung, among French companies.
Nokia rebranded its Withings division as Nokia Digital Health in February 2017 and then pumped added extra investment and attention into boosting the division after shuttering other operations, namely another effort it had made into hardware, in VR cameras. The work did not pay off, however.
The news is the latest chapter in how Finland’s Nokia, once the world’s biggest mobile phone maker, has continued to struggle to find ways to forge ahead in using some of its extensive IP to dive into the consumer market.