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Oracle to acquire Cerner for $28.3 billion in push for healthcare sector

By Arghyadeep on Dec 21, 2021 | 03:31 AM IST

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• U.S. healthcare topped $3.8 trillion last year

• Oracle expects the deal to close in 2022, and it will be the biggest ever after the PeopleSoft acquisition in 2004

Enterprise software developer Oracle Corp on Monday said it would acquire medical information technology services provider Cerner Corp for $28.3 billion to strengthen its presence in the healthcare sector.

Oracle said in the all-cash acquisition deal, Cerner shareholders will receive $95 cash per share, representing a premium of 5.8% to the company’s closing price on Friday.

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The deal will help the software maker bolster Cerner’s services, like the clinical system, which already uses Oracle Database, to healthcare clients, including insurers.

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

Ellison also claimed that the new generation of medical information systems would lower the administrative workload, improve patient privacy and outcomes, and lower healthcare costs.

Demand for medical data

Cerner, the most prominent software provider for electronic recording of healthcare data in the U.S. after Epic Systems, will give Oracle access to data to train and improve its AI-based cloud services.

The software maker said it expects the deal, which is likely to close in 2022, will add to revenue growth immediately after the acquisition.

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“Healthcare is the largest and most important vertical market in the world—$3.8 trillion last year in the United States alone,” Oracle CEO Safra Catz said.

“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.”

The company added that Cerner would be organized as Oracle’s dedicated industry business unit.

Demand for cloud-based solutions in the healthcare sector, including telehealth services and health record automation, has picked up the pace since the pandemic.

The deal will be Oracle’s biggest ever after it bought PeopleSoft in 2004.

Picture Credit: Investing.com

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