• M&A
  • December 20, 2021
  • 4 minutes read

Tech Giant Oracle To Buy Health Records Company Cerner For $28B

There’s a huge new deal in the tech industry. Software giant Oracle (NYSE: ORCL) is making its biggest-ever acquisition with…

Oracle Chairman Larry Ellison
Oracle Chairman Larry Ellison

There’s a huge new deal in the tech industry. Software giant Oracle (NYSE: ORCL) is making its biggest-ever acquisition with Cerner (NASDAQ: CERN), a company that makes software used by health facilities to store and access medical records. Oracle will pay $28.3bn in cash for the publicly-traded company,

  • Electronic health records (EHR) software represents a big pile of the enterprise software market in America, with costs running into a few ten thousand dollars per physician. Take, for example, Mayo Clinic, the mega-hospital chain, which paid $1.5bn to implement an EHR system from Epic Systems in 2018. It’s big enough that Cerner brought in $5.5bn in sales last year with just 25% of the market under its belt.


  • Oracle is a major enterprise software player, so it’s no surprise that it’s expanding its turf by buying Cerner. Notably, this is Oracle’s biggest acquisition in its nearly five-decade history. It’s almost triple Oracle’s biggest purchase on record; HR software provider PeopleSoft for $10.3bn.


  • Cerner will help boost Oracle’s already-established presence in the healthcare industry. The tech giant offers a wide range of software services to medical facilities, including data collection, billing and revenue management and data collection. For example, Oracle offers its database and software for health agencies that require a QR-based Covid health pass for specific individuals.

Cerner will be a dedicated business unit at Oracle post-acquisition, led by CEO David Feinberg who’ll report to Oracle’s CEO, Safra Catz. The health records company will maintain its headquarters in Kansas City, Missouri. Oracle says Cerner will be the anchor for its expansion in the healthcare industry.

Oracle’s bid for Cerner is a premium of around 20% to the company’s stock price when rumors about an acquisition began floating. It’s a reasonable premium for a deal of this type, more so that Oracle is paying entirely with cash. Oracle disclosed¬†$22.8bn in cash reserves and securities at the end of November, offset by $73bn in long-term debt facilities, so it can easily afford the acquisition.

  • Oracle’s stock slid down 4.9% on Monday. The tech giant has a current market capitalization of $251bn.


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