Kansas City-based Cerner to be acquired by tech giant Oracle for $28.3 billion
Software giant Oracle announced Monday that it has reached an agreement to purchase healthcare IT company Cerner Corp. for $28.3 billion.
The news ends years of takeover speculation regarding Cerner, the largest private employer in the Kansas City area and a top player in the world of healthcare IT. In the all-cash deal, Oracle agreed to pay $95 per Cerner share, a premium over the approximate $80 price that the stock was trading at before news of the Oracle merger broke.
The sale is expected to close sometime next year, pending approval from regulators and Cerner shareholders.
Oracle is known for its aggressive acquisition strategy, having purchased dozens of companies in the last decade alone. Yet its purchase of Cerner is the largest deal in that company’s history and one of the largest mergers of the year.
Oracle has characterized the merger as mutually beneficial: The tech giant can lend its software expertise and resources to Cerner, who will deliver Oracle a substantial presence in the healthcare business.
“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,” Larry Ellison, chairman, founder and chief technology officer at Oracle, said in a news release announcing the acquisition.
Oracle characterized Cerner as an “anchor asset” in its quest to expand into the lucrative healthcare industry. The company said it plans to expand Cerner’s medical records technology into more countries across the globe.
While Cerner is being acquired, Oracle said the Kansas City company would continue its work as a dedicated business under the parent firm’s umbrella. Both companies also assured that the healthcare IT firm would retain a substantial jobs presence in Kansas City, where Cerner employs about 13,000 people currently.
Oracle’s news release says it “intends to maintain and grow Cerner’s community presence, including in the Kansas City area.” Cerner currently employs some 28,000 people across the globe.
“As part of Oracle, Cerner expects to have a greater opportunity to grow and strengthen Kansas City as a true center of excellence for healthcare” said William Zollars, chairman of Cerner’s board. “This combination aligns a leading tech company with a leading healthcare company, enabling us to answer a higher calling that Cerner’s founders envisioned from the start. The expected result will yield a patient impact that can truly transform healthcare worldwide.”
Kansas City Mayor Quinton Lucas said he planned to have discussions with Cerner leaders on Monday on how the sale would impact the local workforce.
“Kansas City will work hard to retain all jobs already here and to gain an even greater presence globally in healthcare technology,” Lucas tweeted.
Cerner was founded in 1979 by Neal Patterson, Paul Gorup and Cliff Illig, who all saw tremendous potential in the worlds of software and information technology. The company pioneered the work of transforming paper medical records into digital records that can easily be shared between doctors and hospitals. Cerner is now a top player in that market, behind only its Wisconsin-based rival Epic.
“Kansas City will forever be proud of the story of innovation, entrepreneurship, and creativity central to the growth of Cerner and our region’s central role in fostering an industry leader in healthcare technology,” Lucas said on Twitter Monday.
This story was originally published December 20, 2021 at 9:46 AM.
