Oracle Corporation (NYSE: ORCL) announced an agreement that it is all set to acquire Cerner (NASDAQ: CERN) in an all-cash tender of approximately $28.3 billion for $95.00 per share.
Cerner is the market leader in providing hospitals and health systems with digital information systems that enable medical professionals to provide superior patient care.
Larry Ellison, Chairman and Chief Technology Officer at Oracle, said that through their collaboration, Cerner and Oracle could transform healthcare delivery by providing medical professionals with better information to help them make better treatment decisions and consequently improve patient outcomes.
“With this acquisition, Oracle’s corporate mission broadens to include the responsibility for providing our overworked medical professionals with a new generation of easier-to-use digital tools that enable secure cloud application access via a hands-free voice interface.”
He continued, “Medical information systems of the new generation have the potential to significantly reduce the administrative burden on medical professionals, to improve patient outcomes and privacy, and to reduce overall healthcare costs substantially.”
During an interview with The Wall Street Journal, Oracle CEO Safra Catz stated that the acquisition would result in immediate non-GAAP earnings accretion.
“The impact would increase substantially in subsequent years. Healthcare is the world’s largest and most valuable vertical market, worth $3.8 trillion in the United States alone last year. We pursued that exact growth strategy when we acquired Net Suite – the only difference is that the Cerner revenue opportunity is significantly larger.”
Highlights of the Acquisition
Oracle is immediately profitable following the all-cash tender offer of $95.00 per share, or $28.3 billion.
On a non-GAAP basis, it contributed significantly more to Oracle’s earnings in the second fiscal year and after that.
As Oracle expands Cerner’s business into numerous additional countries worldwide, Cerner will provide Oracle with significant additional revenue in the years to come.
The transaction is expected to close in 2022. The transaction is subject to regulatory approvals and other closing conditions, including the tender offer of a majority of Cerner’s outstanding shares by Cerner stockholders.
Oracle expects to maintain its investment-grade credit rating
Oracle brings extensive experience assisting in powering the world’s largest industries.
Oracle provides industry solutions that enable customers in the world’s largest industries to run their core operations.
Oracle’s current industry coverage includes financial services, telecommunications, utilities, pharmaceuticals, hospitality, retail, food and beverage, construction and engineering, manufacturing, and government.
Additionally, Oracle leverages best-in-class cloud infrastructure to accelerate digital transformation, significantly lowering the total cost of IT in these critical industry sectors.