Cerner will become a dedicated industry business unit within Oracle, whose goal is to increase revenue and expand into healthcare.
Software giant Oracle will buy healthcare IT company Cerner in a cash deal of $ 95 per share, or roughly $ 28.3 billion in equity value in its largest acquisition to date.
The two companies announced the agreement today (December 20), and the transaction is expected to close in 2022. Oracle expects this agreement to improve its revenue as it expands into the healthcare industry.
Cerner is a provider of digital information systems used in hospitals. Oracle said in a statement that its modern technologies such as the cloud, artificial intelligence, machine learning and other innovations can make care more accessible, safe and effective for patients and caregivers.
Oracle President and CTO Larry Ellison said both companies have the ability to transform healthcare by providing healthcare professionals with a new generation of digital tools to access information and secure applications in the cloud.
“This new generation of health information systems promises to reduce the administrative workload that burdens our medical professionals, improve privacy and patient outcomes, and lower overall health care costs.”
Oracle CEO Safra Catz said healthcare is the world’s largest and most important vertical market, worth $ 3.8 trillion last year in the US.
“Cerner will be a huge engine of additional revenue growth for years to come as we expand its business to many more countries around the world. That is exactly the growth strategy we adopted when we bought NetSuite, except that the income opportunity from Cerner is even greater. “
Catz said he expects the acquisition to increase Oracle’s earnings in the first full fiscal year after closing “and contribute substantially more to earnings in the second fiscal year and beyond.”
Cerner will be organized as a dedicated industry business unit within Oracle, becoming its active anchor for expanding into healthcare. Oracle also plans to increase 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 modernizing electronic medical records, enhancing the caregiver experience and enabling greater connection, high quality, and efficient patient care. “
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