“Oracle Corporation (NYSE: ORCL) and Cerner Corporation today jointly announced an agreement for Oracle to acquire Cerner through an all-cash tender offer for $95.00 per share, or approximately $28.3 billion in equity value. Cerner is a leading provider of digital information systems used within hospitals and health systems to enable medical professionals to deliver better healthcare to individual patients and communities.”
“Working together, Cerner and Oracle have the capacity to transform healthcare delivery by providing medical professionals with better information—enabling them to make better treatment decisions resulting in better patient outcomes,” said Larry Ellison, Chairman and Chief Technology Officer, Oracle. “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.”
“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.” “Healthcare is the largest and most important vertical market in the world—$3.8 trillion last year in the United States alone. 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.”
“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. We are also very excited that Oracle is committed to maintaining and growing our community presence, including in the Kansas City area.”
“Oracle’s Autonomous Database, low-code development tools, and Voice Digital Assistant user interface enables us to rapidly modernize Cerner’s systems and move them to our Gen2 Cloud,” said Mike Sicilia, Executive Vice President, Vertical Industries, Oracle. “This can be done very quickly because Cerner’s largest business and most important clinical system already runs on the Oracle Database. No change required there. What will change is the user interface. We will make Cerner’s systems much easier to learn and use by making Oracle’s hands-free Voice Digital Assistant the primary interface to Cerner’s clinical systems. This will allow medical professionals to spend less time typing on computer keyboards and more time caring for patients.”
- All-cash tender offer for $95.00 per share, or approximately $28.3 billion, that is immediately accretive to Oracle’s earnings.
- Accretive to Oracle’s earnings on a non-GAAP basis in the first full fiscal year after closing and will contribute substantially more to earnings in the second fiscal year and thereafter.
- Cerner will be a huge additional revenue growth engine for Oracle for years to come as Oracle expands Cerner’s business into many more countries throughout the world.
- Transaction is expected to close in calendar year 2022. The closing of the transaction is subject to receiving certain regulatory approvals and satisfying other closing conditions including Cerner stockholders tendering a majority of Cerner’s outstanding shares in the tender offer.
- Oracle anticipates retaining an investment grade credit rating…
- Oracle also brings best in class cloud infrastructure to drive digital modernization, substantially lowering the total cost of IT in these critical industry sectors.
- Cerner is a leader in the healthcare IT industry and a complementary business to Oracle.
- Cerner is a leading provider of digital information systems used within hospitals to enable medical professionals to deliver better healthcare to individual patients and communities.
- Cerner has over four decades of experience modernizing electronic health records, improving the caregiver experience, and streamlining and automating clinical and administrative workflows.
- Together, Oracle and Cerner will protect customer investments and transform healthcare.
- According to a recent study by the Mayo Clinic1, physicians spend 1 to 2 hours on EHRs and desk work for every hour spent in face-to-face contact with patients, as well as an additional 1 to 2 hours of personal time on EHR related activities.
- Working together, Cerner and Oracle have the capacity to address these issues and transform healthcare delivery by providing medical professionals with better information—enabling them to make better treatment decisions resulting in better patient outcomes.
- Customer investments in Cerner are also protected with this combination and will grow in value over time as more modern and connected technologies are made available.
- With Oracle’s resources, infrastructure and cloud capabilities, Cerner will accelerate the pace of product and technology development to enable more connected, high-quality, and efficient care.
- Oracle’s focus on usability and voice enabled user interfaces will dramatically reduce the amount of time that medical providers spend dealing with systems and increase the time they spend directly caring for patients…” Read more here.
Source: Oracle Buys Cerner, December 20, 2021. Oracle.
G2X TAKE: This Cloud Technology company has announced an all-cash tender offer for $95.00 per share, or approximately $28.3 billion in equity value which will allow this leading provider of digital information systems to accelerate the pace of product and technology development to enable more connected, high-quality, and efficient care through access to joint resources, infrastructure and cloud capabilities.
- The news in 2018 that VA had signed a contract with Cerner intended to modernize its healthcare IT system and help provide seamless care to veterans as they transition from military service to veteran status, and when they choose to use community care will come as no surprise to anyone. At the time it was noted as one of the largest IT contracts in the federal government, with a ceiling of $10 billion over 10 years. See the initial announcement here.
- In 2020 alone we noted a $131M EHR Modernization Wave F Deployment task; $122M in tasks for EHRM Pharmacy Development and Functional Operations Support; a $130M Veterans Affairs task for EHR Modernization Software Development; a $161M task with VA for VISN 10 Deployment Activities; and a $126M task with VA to provide EHRM Enterprise Program and Project Management Support.
- On the leadership front, Cerner has continued to bring in and promote key talent, in the past year tapping MHS GENESIS Program Management SME Greg Knobel as Director & Federal Program Executive; recruiting industry veteran Tammy Savage to help drive Federal Proposal Management; tapping Avinay Vaswani as Vice President; naming Nasim Afsar as the Company’s First Chief Health Officer; and recruiting longtime VA Health System Specialist Jeffery Peconge as Senior Engagement Owner.
- Cerner was named in 2020 to the Fortune 500 list for the first time ever and was named one of the NXT UP firms poised to make big waves in the Federal sector in 2020 and for years to come.
- We should also note that Daniel Thode, Cerner’s Managing Director, Defense and Military Health was recently named to the 2022 FedHealthIT100, recognizing individuals for driving change and advancement in the Federal Health Information Technology and Consulting Market.
- Oracle has also been building out its team as well with notable moves to include recruiting Brian Jones as Regional VP – US Federal Civilian Agencies; adding former GSA IT acquisition leader Sandy Barsky; and the addition of recent Army Deputy CIO Greg Garcia as Industry Executive Director, Federal Government.
Of course, this was big news yesterday across the Federal health space. Here are some highlights of other coverage:
“Officials noted that the acquisition should support continuous development and modernization of the EHR through Oracle’s cloud. Additionally, with Cerner systems running on the Oracle database, only specifically authorized medical professionals will be able to access patient data.
“Oracle’s Autonomous Database, low-code development tools, and Voice Digital Assistant user interface enables us to rapidly modernize Cerner’s systems and move them to our Gen2 Cloud,” said Mike Sicilia, executive vice president of vertical industries at Oracle. “This can be done very quickly because Cerner’s largest business and most important clinical system already runs on the Oracle Database…”
“In an emailed statement to EHRIntelligence, Natalie Schibell, a senior analyst at Forrester, noted that the acquisition’s success will be primarily determined Oracle’s cloud-first strategy…” Read the full article here.
Source: Oracle Acquires EHR Vendor Cerner for $28.3 Billion in Equity – By Hannah Nelson, December 20, 2021. EHR Intelligence.
“Microsoft said in April it plans to pay $16 billion in cash for Nuance Communications, which builds artificial intelligence and other digital tools for health industry clients. Amazon acquired startup health application company Health Navigator in 2019 and folded it into Amazon Care, the e-commerce giant’s virtual health business.”
“With that bit of commercial but important context out of the way: we do acknowledge Cerner’s federal business was likely not the carrot in Oracle’s eye, but is certainly noteworthy…”
“The questions we have from this corner start and end with this: just what will the VA make of Oracle’s agreement to acquire Cerner? The transaction will go through an antitrust regulatory review just like Microsoft-Nuance…” Read the full article here.
Source: What Oracle’s planned $28B Cerner acquisition means to federal – By Ross Wilkers, December 20, 2021. Washington Technology.