Dive Brief:
- Oracle has closed its $28.3 billion acquisition of electronic health record company Cerner.
- The deal announced late last year was an all-cash tender offer of $95 per share. On Tuesday, software giant Oracle said the majority of Cerner’s outstanding shares have been validly tendered and the deal will close Wednesday.
- Leadership have hailed Kansas City, Missouri-based Cerner as a “huge growth engine” for the software giant as Oracle elbows further into the healthcare space. Oracle said Cerner will be immediately accretive to the company’s earnings.
Dive Insight:
Oracle’s acquisition of Cerner is now the biggest completed digital health deal, followed by Microsoft’s $19.7 billion acquisition of clinical documentation company Nuance Communications and telehealth giant Teladoc’s $18.5 billion snap-up of chronic care manager Livongo.
It’s also Oracle’s largest acquisition, blowing past the company’s $10 billion purchase of PeopleSoft in 2005.
Prior to the buy, Oracle’s health presence was mostly in data-use efficiency for payers and providers. But the database software and cloud systems provider was interested in stepping deeper into the industry, attracted by its revenue opportunity. Cerner will be Oracle’s anchor asset to expand into healthcare, the "largest and most important vertical market in the world," Oracle CEO Safra Catz said in a December statement.
In December, Oracle announced it planned to acquire Cerner — the second-largest EHR in the country by acute hospital market share — and keep it as a standalone business unit. Oracle plans to focus the unit on medical software usability and voice-enabled user interfaces, to try to free up providers to spend more time directly caring for patients. Oracle also plans to expand Cerner’s business to “many more countries throughout the world,” according to a June 1 release.
The Oracle-Cerner matchup received all necessary regulatory approvals earlier this month with a final green light from the European Union. The deadline for U.S. regulators to challenge the deal passed in February.
The days of standalone EHR vendors are increasingly in the rearview mirror. Well before the Oracle buy, Cerner — which had long operated under rumors that it was shopping for a buyout — had already begun repositioning itself away from the legacy EHR business and more toward data-as-a-service offerings.
Late last year, health IT vendor Athenahealth was bought out by two private equity companies in a $17 billion deal. And in March, EHR company Allscripts announced it was selling much of its legacy EHR business to a Canadian holding company.
