Oracle Delves into Healthcare, Acquires Cerner in A $28.3 Billion All-Cash Deal

Oracle has announced the acquisition of Cerner, a leading provider of digital information systems used to enable medical professionals to deliver better healthcare to individual patients and communities, in an all-cash tender offer worth about $28.3 billion.

The transaction is subject to regulatory approvals and is expected to close in calendar year 2022, as Cerner stockholders are expected to tender a majority of Cerner’s outstanding shares in the tender offer.

Oracle said the $28.3 billion is immediately accretive to Oracle’s earnings and will continue on a non-GAAP basis in the first full fiscal year. It is expected to contribute substantially more to earning in the second fiscal year and thereafter, the company said, adding that 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.

“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.

Oracle is a leader in cloud technology, driving digital modernization that has helped to lower the cost of cloud infrastructure and IT in many sectors.

Before venturing into the health sector with the acquisition of Cerner, Oracle covered industries such as Financial Services, Telecom, Utilities, Pharmaceuticals, Hospitality, Retail, Food & Beverage, Construction & Engineering, Manufacturing and Government. Oracle provides industry solutions that run the core operations for customers in the world’s largest industries.

On the other hand, Cerner is a leader in the healthcare IT industry with over four decades of experience in modernizing electronic health records, improving the caregiver experience, and streamlining and automating clinical and administrative workflows.

Both companies believe they complement each other and will work together to protect customer investments, transform healthcare and accelerate revenue growth.

“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,” said Safra Catz, Chief Executive Officer, Oracle.

Growing frictions in the healthcare industry present huge challenges to speed and efficiency of medical practitioners. A Mayo Clinic1 study quoted by Oracle says that 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.

These companies believe, among other challenges, they work together.

“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.”

Cerner’s acquisition is Oracle’s biggest transaction in 40 years. It also marks its ground-breaking move into healthcare.