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2021-12-21| M&A

Oracle Acquires Cerner to Expand Digital Healthcare Management Offerings

by Sahana Shankar
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Oracle, an industry leader in software solutions, announced an agreement with Cerner Corporation for an all-cash buyout on December 20,2021. Headquartered in Kansas City, Missouri, Cerner is a digital healthcare company that develops management solutions for electronic health records (EHR) in hospitals and private practices for easy access, analysis and storage of multiple parameters of patients’ healthcare data. 

This is the latest in a surge of global M&As in the healthcare sector, which is enjoying a massive boost due to the Covid-19 pandemic. For the first time ever, healthcare deals reached $5 trillion in 2021

Oracle, based in Austin, Texas, has a market capital of $264 billion. At $95 per share and a total equity value of $28 billion, this is Oracle’s biggest ever acquisition, since its inception in 1977. The deal is expected to be completed in 2022, after the necessary regulatory approvals are obtained. Oracle’s shares fell 5% on Monday, December 20, 2021, right after the announcement.

“We expect this acquisition to be immediately accretive to Oracle’s earnings on a non-GAAP basis in the first full fiscal year after closing—and contribute substantially more to earnings in the second fiscal year and thereafter,” said Safra Catz, Chief Executive Officer, Oracle.

 

Bringing in a Swiss Knife of Digital Healthcare Systems

 

Cerner is a 40-year-old healthcare IT company with an annual revenue of $5.5 billion in 2020. With a diverse array of health management systems such as analytics for EHR, community care registries, patient engagement and referral management,  Cerner has had a good run in 2021 with a 7% growth in the third quarter of 2021. Recently, Dr. Nasim Afsar was named the company’s first Chief Health Officer, who takes charge from January, 2022 to guide product development. 

“Cerner has been a leader in helping digitize medical care and now it’s time to realize the real promise of that work with the care delivery tools that get information to the right caregivers at the right time,” said David Feinberg, President and Chief Executive Officer, Cerner. “Joining Oracle as a dedicated Industry Business Unit provides an unprecedented opportunity to accelerate our work modernizing electronic health records (EHR), improving the caregiver experience, and enabling more connected, high-quality and efficient patient care.

 

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