3M Co.'s health information systems unit is off the market. The company will instead invest in the "healthy and rapidly growing business," CEO Inge Thulin said Tuesday.
The company said in September it would explore "strategic alternatives" for the business, which included selling it or spinning it into another company.
On Tuesday, officials said 3M would make the unit larger instead.
The division, part of 3M's $5.4 billion Health Care Business, helps hospitals, clinics and insurance companies save time and money by providing software and algorithms that document and track patient care. Its systems allow computer-assisted coding, digital clinic documentation and the tracking of quality outcomes and trends from large bodies of information.
Keeping the health information systems unit will help 3M "derive even greater long-term value," Thulin said in a statement. "We are committed to continued innovation in health care information systems and helping providers and payers improve patient outcomes while reducing the total cost of care."
News of 3M's decision initially surprised investors. But Edward Jones analyst Matt Arnold said that occasional value assessments of divisions are smart.
"Over time, 3M frequently evaluates the strategic fit of each business and the best course forward to maximize their value," Arnold said. "We think this is a healthy process and have high confidence in the decisionmaking process for evaluating business in general at 3M."
He added that additional investments in the health systems business should "keep it growing at a healthy pace."
After several large acquisitions, 3M decided in recent months to sell its French license plate making company, a pressurized foam adhesives business and its $100 million library systems businesses.
3M posted the health information system news after the market closed Tuesday.
It also announced that the company's board of directors had authorized the repurchase of up to $10 billion of 3M's outstanding common stock and declared a dividend of $1.11 per share for the first quarter of 2016, an 8 percent increase over the same period a year ago.
At the market's close, the company's stock was at $147.87 a share, down 86 cents. However, it was even following after-hours trading.