Oracle completes $28 billion purchase of Cerner, ‘a huge engine of growth’

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Diving brief:

  • Oracle has completed its $28.3 billion acquisition of electronic health records company Cerner.
  • The deal announced late last year was a cash tender offer of $95 per share. On Tuesday, software giant Oracle said the majority of Cerner’s outstanding shares had been validly tendered and the deal would close on Wednesday.
  • Executives hailed Kansas City, Mo.-based Cerner as a “huge growth engine” for the software giant as Oracle pushes deeper into the healthcare space. Oracle said Cerner would be immediately accretive to company earnings.

Overview of the dive:

Cerner’s acquisition by Oracle is now the biggest ever digital health deal, followed by Microsoft’s $19.7 billion acquisition of clinical documentation company Nuance Communications and the telehealth giant’s takeover Teladoc for $18.5 billion from chronic care manager Livongo.

It is also Oracle’s largest acquisition, surpassing the company’s $10 billion purchase of PeopleSoft in 2005.

Prior to the purchase, Oracle’s presence in healthcare focused primarily on efficient data usage for payers and providers. But the database software and cloud systems provider wanted to get more involved in the industry, lured by its revenue opportunities. Cerner will be Oracle’s anchor asset to grow in healthcare, the “world’s largest and most important vertical market,” Oracle CEO Safra Catz said in a statement. december.

In December, Oracle announced plans to acquire Cerner — the nation’s second-largest EHR by acute hospital market share — and retain it as a standalone business unit. Oracle plans to focus the unit on medical software usability and voice user interfaces, to try to free up providers to spend more time dealing directly with patients. Oracle also plans to expand Cerner’s business to “many more countries around the world,” according to a June 1 statement.

The Oracle-Cerner matchup received all necessary regulatory approvals earlier this month with the final green light from the European Union. The deadline for US regulators to challenge the deal passed in February.

The era of standalone EHR vendors is increasingly in the rearview mirror. Long before the Oracle purchase, Cerner — which had long operated under rumors that it was seeking a takeover — had already begun to reposition itself away from the legacy EHR business and more toward data-as-a-service offerings.

Late last year, health IT provider Athenahealth was acquired by two private equity firms in a $17 billion deal. And in March, EHR firm Allscripts announced it was selling much of its former EHR business to a Canadian holding company.


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