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Oracle to buy Cerner for $28.3 billion

Oracle on Monday announced plans to acquire electronic health records giant Cerner in a deal valued at $28.3 billion.

The Austin, Texas-based tech giant will acquire Kansas City, Missouri-based Cerner through an all-cash tender offer of $95 per share in a transaction expected to close in 2022. The transaction is subject to certain regulatory approvals and closing conditions, including Cerner stockholders agreeing to sell a majority of Cerner’s outstanding shares as part of Oracle’s offer.

Once the transaction closes, Cerner will become a business unit within Oracle.

Cerner will be Oracle’s “anchor asset” as it expands into healthcare, according to a news release issued by Oracle and Cerner.

“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, Oracle’s chairman and chief technology officer, in the news release.

“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 Dr. David Feinberg, Cerner’s president and chief executive officer, in the news release. He said the acquisition will help to “accelerate” Cerner’s work to modernize EHRs.

Oracle will move Cerner’s systems to its cloud data centers.

Oracle officials said they plan to apply the company’s resources, infrastructure and cloud capabilities to speed product development and create tools that use artificial intelligence to improve patient outcomes. The companies will also add Oracle’s voice assistant technology into Cerner’s clinical systems, which can help to reduce administrative burden.

Cerner is a “huge additional revenue growth engine” for Oracle, said Safra Catz, Oracle’s CEO, in the news release, as Oracle plans to expand Cerner into new international markets. He said the revenue opportunity with acquiring Cerner is larger than NetSuite, a company that Oracle bought for $9.3 billion in 2016.

The deal is expected to be immediately accretive to Oracle’s earnings in the first full fiscal year after the transaction closes.

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