Health IT: Oracle buys EHR provider Cerner
Giant software provider Oracle has acquired Cerner, an electronic health record (EHR) software provider to the US healthcare market and a leading supplier to the NHS, for $28.3 billion.
Following the acquisition, Cerner shareholders will receive $95 per share in cash.
The deal will help Oracle boost its presence in the healthcare space bringing a collection of health data to its cloud services.
Founded in 1979, Cerner is a global provider of digital information systems used within hospitals to enable medical professionals to deliver better healthcare to individual patients and communities. In the last year, Cerner has won more than £100 million in NHS contracts, reports suggest.
The company reported revenue of $5.5 billion in 2020.
Interestingly, Oracle shares were down 2.5% to $94.10 on Monday morning after the bell – sitting at $92.79 at the time of writing. They initially fell 6% on Friday after The Wall Street Journal first reported that Oracle would buy Cerner.
Larry Ellison, Oracle’s chairman and chief technology officer, said: “With this acquisition, Oracle’s corporate mission expands to assume the responsibility to provide our overworked medical professionals with a new generation of easier-to-use digital tools that enable access to information via a hands-free voice interface to secure cloud applications.
“This new generation of medical information systems promises to lower the administrative workload burdening our medical professionals, improve patient privacy and outcomes, and lower overall healthcare costs.”
Safra Catz, Oracle’s chief executive, said the acquisition should be “immediately accretive to Oracle’s earnings” on an adjusted basis in the first full fiscal year after closing and contribute “substantially more” to earnings in the second fiscal year and thereafter.
He added: “Oracle’s revenue growth rate has already been increasing this year—Cerner will be a huge additional revenue growth engine for years to come as we expand its business into many more countries throughout the world. That’s exactly the growth strategy we adopted when we bought NetSuite—except the Cerner revenue opportunity is even larger.”
David Feinberg, Cerner’s president and chief executive, added “Joining Oracle as a dedicated Industry Business Unit provides an unprecedented opportunity to accelerate our work modernizing EHR improving the caregiver experience, and enabling more connected, high-quality and efficient patient care.”
The deal is Oracle’s biggest ever after its acquisition of human resource management systems provider PeopleSoft in 2004.
The transaction is expected to close in 2022.
Date published: December 20, 2021