Oracle in negotiations to buy a certificate
in talks to buy an electronic medical record company
, according to people familiar with the matter, a deal could be worth around $30 billion and propel the enterprise software giant further into healthcare.
Some say a deal could be finalized soon, assuming negotiations don’t break down or drag on. If a deal comes together, it would rank as the largest ever for Oracle, which has a market value of more than $280 billion.
Cerner is based in Kansas City, Mo. designs software that hospitals and doctors use to store and analyze medical records and other healthcare data. It has a market value of about $23 billion. At typical acquisition fees, a deal would be expected to value the company at the equivalent of $30 billion, although the exact terms being discussed are unknown.
Oracle, a Silicon Valley veteran that moved its headquarters to Austin, Texas last year, is one of the largest suppliers of software to other companies and organizations.
In August, Cerner mined David Feinberg
is the chief executive officer, a role he took up in October. Mr. Feinberg hails from Oracle rival Google, where he has led
the unit’s push into the healthcare sector and helped build a partnership with some of the country’s largest hospital systems to collect and analyze their data.
Oracle already has a significant presence in healthcare, providing technology to help health insurers, healthcare providers, and public health systems analyze data. to increase efficiency and improve patient outcomes.
Oracle stock closed Thursday at $103.22, down slightly amid a widespread tech sell-off and just hit an all-time high hit the previous day. They jumped more than 15% last week as the company reported second-quarter financial results that beat estimates and CEO Safra Catz reiterated expectations that full-year revenue growth will accelerate year-over-year. . Miss Catz, who became the sole CEO in 2019, said she expects the company’s operating profit margin to be the same or better than it was before the pandemic.
The company also increased its share buyback authorization to $10 billion.
Buying Cerner can help Oracle move towards the cloud. Investors have fanned Oracle as the company focuses on winning the cloud business, after initially being slow to capture the booming market for data storage and analysis on servers from far away. Oracle has been trying to build a foothold in recent years after falling behind companies like
, both now have a market value in excess of $1 trillion thanks in part to their thriving cloud units.
A deal for Cerner will follow Microsoft’s April deal to buy the artificial intelligence company
for $16 billion, bet on an increase demand for digital healthcare tools.
Oracle was founded by outspoken billionaire Larry Ellison and others in 1977. Mr. Ellison owns about 42% of the company, a stake worth more than $100 billion. Mr. Ellison transferred the CEO rights to Mrs. Catz and the late Mark Hurd in 2014, but remains chairman and chief technology officer.
A deal for Cerner would easily top Oracle’s next biggest deal, the purchase of about 10 billion dollars of enterprise software company PeopleSoft Inc. closed in 2005, followed by a $9 billion deal for cloud software provider NetSuite Inc. in 2016.
In 2020, Oracle shows appetite for bigger deals when it beat Microsoft bid for the operation of video-sharing app TikTok in the United States. The Trump administration’s concerns about TikTok’s Chinese ownership effectively put the business on hold, but the deal fell through. keep indefinitely by the Biden administration.
Cerner, founded in 1979, competes with private corporations such as Epic Systems Corp. and Athenahealth Inc., recently agreed to sell for a group of private equity firms of another group for about $17 billion including debt.
Shares of Cerner rose slightly to $79.49 on Thursday.
The Oracle-Cerner deal will rank as one of the biggest acquisitions of 2021, shaping up to be one of the busiest ever for mergers and acquisitions. Merger activity in the US grew 78% to $2.45 trillion, according to Dealogic, as sky-high share prices and easy money spurred companies to strike deals and targeted acquisitions. Special goals are formed at breakneck speed.
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