MCLEAN, VA—Capital One Financial Corp. said Tuesday afternoon it had signed a definitive agreement to acquire $8.5 billion of healthcare-related loans and the Healthcare Financial Services business of General Electric Capital Corp. in a  deal valued at approximately $9 billion. The healthcare finance platform includes mortgages and other loans to operators, investors and developers of seniors housing, medical office buildings, hospitals, pharmaceutical companies and related operations. Separately, GE Capital agreed to sell $600 million of HFS real estate equity investments to an unidentified buyer.

For Fairfield, CT-based GE Capital, the deal marks another milestone in the parent company's exit from the financial services business, a process that began this past spring with its sale of real estate debt and assets to the Blackstone Group and Wells Fargo. “This announcement is the next step in GE's transformation to a more focused industrial company,” says Keith Sherin, GE Capital chairman and CEO. He adds that the company is on track to reduce its ending net investment by $100 billion by year's end 2015 and to be substantially done with its exit strategy by the end of 2016.

For Capital One, it represents “a strategic investment in a specialty industry segment that we have been building out for the past several years,” says Michael Slocum, president of Capital One's Commercial Bank. “This addition will catapult us to a leading market position in providing financial services to the healthcare sector.”

Capital One sees the addition of HFS as boosting the financial services firm's already strong healthcare lending business and creating a leading healthcare banking platform. The company says it will benefit from HFS' broad customer base and risk management platform as it brings to the new unit the resources of a top 10 US bank, including a more complete suite of lending and depository products, as well as treasury management services.

Darren Alcus, president and CEO of HFS, will join Capital One as president of its healthcare finance business, and the HFS management team and employees will also be retained. "We are excited to join forces with the healthcare finance professionals at Capital One—they share our vision for providing the financial solutions that this complex industry demands," Alcus says. "The healthcare sector offers tremendous potential for growth, and I am confident that together we will offer the best-in-class expertise and tailored financial products that meet the needs of healthcare businesses across the country."

As part of the agreement, GE Capital will retain the financing “verticals” that relate to GE's industrial businesses. These include a unit that provides healthcare equipment financing to GE Healthcare customers and others.

The acquisition is subject to customary regulatory and other approvals and is expected to close in the fourth quarter of this year. Credit Suisse and Wells Fargo Securities acted as exclusive financial advisors to Capital One, and Wachtell, Lipton, Rosen & Katz acted as its legal advisor. Citigroup Global Markets Inc. and J.P. Morgan Securities LLC provided financial advice to GE and Hogan Lovells US LLP provided legal advice.