Oracle nears deal to buy Cerner
Author: Riccardo Ciuffreda, M&A associate
Oracle is in talks to buy healthcare IT Cerner, a deal that could be worth around $30B; as reported by WSJ on December 16th, 2021.
Oracle, that last year moved its headquarters to Austin, Texas, is one of the biggest software providers to other companies and organizations. Oracle already has a major presence in healthcare, selling technology to health insurers, healthcare providers and public health systems. Buying Cerner could help Oracle with its pivot toward the cloud.
Cerner, company based in Kansas City, is the largest seller of “electronic” medical record software in the US after Epic Systems Corp. In 2019 Cerner made Amazon Web Services his reference cloud provider specifying that they were collaborating on AI services for healthcare companies. According to the Bloomberg, the healthcare IT company has a market capitalization of around $26.4M .With a typical takeover premium, a deal would be expected to value the company at something like $30B, though exact terms being discussed could not be learned. In recent months, Cerner has chosen David Feinberg as CEO, former Google (Oracle competitor): at the service of parent company Alphabet has led some projects related to healthcare. The company recently collaborated with the Vaccination Credential Initiative, to launch a global digital passport to facilitate international travel following the Covid-19 outbreak in late 2019.
The move to acquire Cerner, best known for creating electronic medical records, follows Microsoft’s $16B agreement to buy speech artificial intelligence company Nuance Communications, as the biggest software companies seek to forge deeper connections in the healthcare industry. This potential Oracle-Cerner deal would push the enterprise software company into the healthcare market and this deal would rank as one of the largest of 2021. As usual, both parties have not commented on the rumours. According to the source, the official announcement could come soon.
Bloomberg, Reuters, Wall Street Journal, Financial Times