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Cerner will become a dedicated industry business unit within Oracle, which aims to boost its revenue and expand into healthcare.
Software giant Oracle will purchase health IT company Cerner in an all-cash deal of $95 per share, or approximately $28.3bn in equity value in its largest acquisition to date.
The two companies announced the deal today (20 December), with the transaction expected to close in 2022. Oracle hopes this deal will enhance its revenue as it expands in the health industry.
Cerner is a provider of digital information systems used within hospitals. Oracle said in a statement that its modern technologies such as cloud, AI, machine learning and other innovations can make care more accessible, secure and effective for patients and caregivers.
Oracle chair and CTO Larry Ellison said both companies have the capacity to transform healthcare by providing medical professionals a new generation of digital tools for information access and 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.”
Oracle CEO Safra Catz said healthcare is the largest and most important vertical market in the world, worth $3.8trn last year in the US.
“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.”
Catz said she expects the acquisition to boost Oracle’s earnings in the first full fiscal year after closing “and contribute substantially more to earnings in the second fiscal year and thereafter”.
Cerner will be organised as a dedicated industry business unit within Oracle, becoming its anchor asset to expand into healthcare. Oracle also plans to grow Cerner’s community presence while helping it reach new locations faster.
Cerner CEO David Feinberg – who joined the company earlier this year – said: “Joining Oracle as a dedicated industry business unit provides an unprecedented opportunity to accelerate our work modernising electronic health records, improving the caregiver experience and enabling more connected, high-quality and efficient patient care.”
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