The NIB Holdings Limited (ASX: NHF) share price is continuing to ascend on the back of another positive update.
At the time of writing, the private health insurer’s shares are swapping hands for $6.31, up 1%.
What did NIB announce?
Investors appear pleased with the company’s strategic direction, pushing NIB shares higher in early morning trade.
In a statement to the ASX, NIB advised it has sold its digital healthcare directory platform, Whitecoat to Commonwealth Bank of Australia (ASX: CBA).
Along with other shareholders, NIB approved the terms of the sale yesterday.
As a result, the company expects to receive roughly $9 million in profit before tax on the sale of its shareholding in Whitecoat.
In the 8 years of operation, Whitecoat has grown to become Australia’s largest digital healthcare services directory. Currently, the online platform features more than 300,000 healthcare providers for consumers to find, book, and pay for treatment. In 2018, Whitecoat expanded its market presence by offering its services to New Zealand.
NIB managing director, Mark Fitzgibbon commented on the sale:
The sale to CBA will lift critical mass and the “network effect” these kinds of platforms rely upon. It will also bring the level of investment required to further develop Whitecoat’s technology.
Just as Elon Musk doesn’t manufacture every component of a Tesla nor will we see single companies build monolithic end to end solutions in the world of digital healthcare. Like for Tesla, our job at nib is to assemble the best tech functionality into a seamless and integrated experience for our members and providers. There remains so much more to do.
Mr Fitzgibbon highlighted that NIB never considered Whitecoat as part of its core strategy. This is because the online platform leans towards healthcare provider payments as opposed to health insurance plans. Furthermore, he assured that the sold-off business represents just one of many components of its total digital ecosystem for consumers and healthcare providers.
About the NIB share price
NIB shares have been on fire lately, storming close to 20% since releasing its trading update and outlook for FY21. It’s worth noting, the company’s shares reached a fresh 52-week high of $6.28 yesterday, before some slight profit-taking occurred.
NIB has a market capitalisation of roughly $2.8 billion, with approximately 457.7 million shares on issue.