Acquire of Cerner By Oracle for a $28.3B Deal

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Oracle Corp.’s $28.30 billion bid for Cerner Corp., a provider of electronic medical records, demonstrates a significant shift toward software specialization, as IT firms increasingly target the tremendous healthcare sector as their next major opportunity.

Oracle, which has been at all-time peaks all year, is investing some of its cash in Cerner, a medical records organization.

Cerner, the second-largest U.S. provider of electronic health records software, will collaborate with Oracle, a top cloud services provider that has lagged behind tech peers such as Amazon.com Inc. and Microsoft Corp., in an amalgamation that is anticipated to close in 2022. Oracle’s healthcare cloud business is likely to benefit from the deal.

“The Cerner deal shows that Oracle agrees that verticalization is an important step to grow its business,” Kessler said. “This acquisition would give Oracle a proverbial shot in the arm to aggressively expand into healthcare, which is a very large vertical, but somewhat behind other industries when it comes adopting digital technologies.”

Cerner, the most prominent provider of electronic health record software in the United States after Epic Systems Corp., already runs its most major commercial and clinical systems on the Oracle Database.

Oracle and Cerner announced an agreement on Monday for Oracle to buy Cerner in an all-cash acquisition for $95 per share, or approximately $28.3 billion in equity value.

It’s Oracle’s biggest deal to date. NetSuite was purchased for $9.3 billion in 2016 to bolster the company’s cloud position. On a non-GAAP basis, Oracle anticipates the purchase to be immediately accretive to earnings in the first full fiscal year after closing. The acquisition is anticipated to be completed in 2022.

Oracle’s acquisition of Cerner should help it expand its prominence in the healthcare market. Cerner, one of the largest healthcare IT businesses in the United States, will provide Oracle with access to a vast amount of health information.

“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,” said Larry Ellison, Chairman and Chief Technology Officer of Oracle.

As for Cerner, David Feinberg, president and CEO said in a statement, “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.”