Oracle to acquire Cerner in $28.3B deal

Transaction is expected to close in 2022, subject to regulatory approval and customary closing conditions

Software giant Oracle announced Monday it will acquire medical record technology provider Cerner in an all-cash deal valued at $28.3 billion, or $95 per share.

ORACLE IN TALKS TO BUY CERNER

The transaction, which is expected to close in calendar year 2022 subject to regulatory approval and customary closing conditions, will be immediately accretive to Oracle’s earnings on a non-GAAP basis in the first fiscal year after closing. 

A logo sign outside of a facility occupied by Cerner in Malvern, Pennsylvania, on May 4, 2020. (Kristoffer Tripplaar/Sipa USA)

Oracle CEO Safra Catz said the deal will be a "huge additional revenue growth engine for years to come" as the company dives deeper into the health care sector and eyes a global expansion of its cloud business. 

In addition, Oracle chairman and chief technology officer Larry Ellison emphasized the move would help "lower the administrative workload burdening our medical professionals, improve patient privacy and outcomes, and lower overall health care costs."

A study by the Mayo Clinic found physicians spend one to two hours on electronic health records (EHRs) and desk work for every hour spent face-to-face with patients, as well as one to two hours of personal time on EHR related activities.

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Oracle, which has a valuation of more than $250 billion, is looking to catch up to tech giants like Amazon and Microsoft, whose valuations have exceeded $1 trillion. In its second quarter earnings for fiscal year 2022, Oracle's total revenue rose 6% year-over-year to $10.4 billion. Cloud services and license support revenues climbed 6% to $7.6 billion, while cloud license and on-premise license revenues surged 13% to $1.2 billion. 

Ticker Security Last Change Change %
ORCL ORACLE CORP. 79.78 +0.19 +0.24%
CERN CERNER CORP. 91.38 +0.26 +0.29%

Shares of the company have slipped more than 4% following the announcement, while Cerner stock is trading flat.