It’s been a pretty rough year for Cerner, and the company is reportedly in talks to sell shares of its business that would be valued at $24 billion. Who will buy it? A slew of companies have emerged as potential buyers including Oracle, Accenture, Microsoft Healthcare Services Group (MSHC), and Infor.
The “is cerner going to be sold” is a question that has been asked by many people. Oracle is in talks to buy Cerner, but the deal might not happen.
According to sources familiar with the subject, Oracle Corp. ORCL -0.41 percent is in discussions to purchase Cerner Corp. CERN 0.72 percent, an electronic-medical-records business, in a transaction that could be worth about $30 billion and push the enterprise-software giant farther into healthcare.
Some of the sources indicated that if the negotiations don’t break apart or drag on, an agreement might be reached shortly. If a transaction is reached, it will be the largest ever for Oracle, which has a market value of over $280 billion.
The company is situated in Kansas City, Missouri. Cerner creates software that is used by hospitals and clinicians to store and analyze medical records and other healthcare data. Its market capitalization is estimated to be approximately $23 billion. With a conventional acquisition premium, a sale would value the firm at over $30 billion, but the actual details of the agreement were not disclosed.
Oracle, a Silicon Valley veteran that relocated its headquarters to Austin, Texas last year, is one of the most important software suppliers to other businesses and organizations.
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Cerner hired David Feinberg as chief executive officer in August, and he started in October. Mr. Feinberg joined Oracle from Google, where he spearheaded the Alphabet Inc. unit’s drive into healthcare, including agreements with several of the country’s major hospital systems to gather and analyze data.
Oracle already has a strong footprint in the healthcare industry, including software that helps health insurers, providers, and public health systems analyze data to enhance efficiency and patient outcomes.
Oracle shares finished at $103.22 on Thursday, down marginally from their all-time high set the day before amid a broad-based tech selloff. They rose over 15% last week after the business posted fiscal-second-quarter earnings that above expectations, and Chief Executive Safra Catz reiterated the company’s outlook for full-year sales growth to rise from the previous year. Ms. Catz, who became the company’s sole CEO in 2019, said she anticipates operating margins to be similar to or greater than they were before the epidemic.
The business also expanded its share buyback authorization by $10 billion.
Oracle’s move to the cloud might be aided by the acquisition of Cerner. After originally being sluggish to embrace the expanding market for storing and analyzing data on distant computers, investors have warmed up to Oracle as the firm focuses more on gaining cloud-computing business. Oracle has been attempting to catch up in recent years after slipping behind firms like Amazon.com Inc. and Microsoft Corp., both of which now have market valuations over $1 trillion, owing in part to successful cloud businesses.
As they battle for a share of the $214 billion cloud computing industry, big IT companies are investing in data centers. The Wall Street Journal outlines what cloud computing is and why big tech is placing large bets on future contracts.
Cerner’s acquisition would follow Microsoft’s $16 billion purchase of artificial-intelligence startup Nuance Communications Inc. in April, a bet on the expanding need for digital healthcare technologies.
Larry Ellison, an outspoken millionaire, and others started Oracle in 1977. Mr. Ellison controls nearly 42% of the company’s stock, which is worth well over $100 billion. Mr. Ellison stepped down as CEO in 2014, handing over the reins to Ms. Catz and the late Mark Hurd, but remained chairman and chief technology officer.
A bid for Cerner would far surpass Oracle’s next-largest transaction, the nearly $10 billion acquisition of corporate software giant PeopleSoft Inc. in 2005, followed by a $9 billion acquisition of cloud software provider NetSuite Inc. in 2016.
Oracle demonstrated its desire for larger purchases in 2020 when it outbid Microsoft for the U.S. operations of the video-sharing app TikTok. The Trump administration’s reservations over TikTok’s Chinese ownership practically placed the company in jeopardy, but the Biden administration put the sale on hold indefinitely.
Cerner, which was formed in 1979, competes with privately owned Epic Systems Corp. and Athenahealth Inc., which recently agreed to a $17 billion sale to one set of private equity companies by another.
Cerner’s stock increased to $79.49 on Thursday.
A combination between Oracle and Cerner would be one of the major takeovers of 2021, which is shaping up to be one of the busiest mergers and acquisitions years ever. According to Dealogic, merger activity in the United States has increased by 78 percent to $2.45 trillion, as high stock prices and cheap money encourage corporations to do deals and special-purpose acquisition companies being established at a fast speed.
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The “cerner layoffs 2021” is a rumor that has been circulating for a while. The rumors are that Oracle is in talks to buy Cerner.
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