Oracles Acquiring Cerner for $28 Billion

Oracle made a significant move at the end of last year, just before Christmas, when it revealed it was acquiring Cerner, an electronic health records business, for $28 billion, vaulting it into the top enterprise transaction for 2021, just before the deadline.
The company announced today that the acquisition is now closed and will go into effect tomorrow.

Oracles Acquiring Cerner for $28 Billion

In some ways, the announcement was anticlimactic, full with corporate financial jargon: “Oracle Corporation (NYSE: ORCL) stated that a majority of Cerner Corporation’s (Nasdaq: CERN) outstanding shares (the “Shares”) were validly tendered, and the tender offer’s other criteria were satisfied or waived. “The transaction is actually expected to close tomorrow on June 8, 2022,” the business said in a statement.

To put it another way, it got around the world’s regulatory monitoring and paid the debt. The deal is effectively closed now that the contracts have been signed and the stock has been transferred (or will be by midnight tonight).

Microsoft paid nearly $20 billion for Nuance Communications in April 2021, and the deal was completed in March. Oracle paid a high price for Cerner to go headfirst into the healthcare business, seeing the same market potential as Microsoft.

According to Holger Mueller, an analyst at Constellation Research, the transaction would transfer the profitable market to Oracle’s cloud, which is why the business was willing to pay such a high price for it.

“Oracle made a wise decision. It further embeds Oracle technology in healthcare and shifts a significant amount of current and future workload to Oracle Cloud. Not to mention the fact that Oracle is investing in the world’s largest and fastest-growing vertical market,” Mueller told me at the time.

Cerner has the capacity to do so, but it will rely on how the two firms integrate in the end, and whether Oracle can turn all of that market potential into a profitable business within Oracle. Whatever the case might be, the deal is complete as of midnight tonight.

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