John Dineen, former president and CEO of GE Healthcare, has signed on with a large private-equity investment firm as an operating advisor.
Park Ave.-based Clayton, Dubilier & Rice announced Oct. 16 that, starting early next year, Dineen will help guide its healthcare-related investments while also advising on management, operational and growth strategies.
The word came 10 days after GE Healthcare—which Dineen had headed since 2008, capping a nearly 30-year GE career—announced that it was replacing him with John Flannery, who had been leading General Electric’s mergers-and-acquisitions activities and reporting directly to GE head Jeffrey Immelt.
It is not clear whether Dineen stepped down of his own accord or was asked to leave, but the elevation of dealmaker Flannery spurred speculation on GE’s strategic thinking among watchers of the medical imaging OEM industry.
The Wall Street Journal noted that the change came as GE’s healthcare business has been showing signs of steady slowdown. Income dropped slightly last year and fell a full percentage point in the first half of 2014 “even as revenues from GE’s other big industrial businesses—including power turbines and jet engines—rose 8%,” the paper reported.
Some investment analysts wondered if Flannery would be charged with spinning off the healthcare business altogether amid gathering investor pressure, but the Journal quoted an unnamed source “familiar with the matter” as saying that—despite how instrumental Flannery has been in a busy year of acquisitions and disposals at GE—the promotion is simply a sign of Immelt’s confidence in Flannery’s management skills.
Immelt reinforced that take. In prepared remarks, he said healthcare “remains a core part of the GE portfolio. We are a market leader with deep innovation from our Global Research Center. Healthcare is an important driver for GE’s strategy in growth markets and the Industrial Internet. GE is poised to benefit as healthcare spending continues to grow around the world.”
Click here to read CD&R’s announcement on Dineen.