$28.3 billion! Oracle acquired Cerner in huge sums and entered the healthcare sector

If it goes well, it will be the largest acquisition in Oracle's history.

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Author | Lu Jieping

On Monday, database giant Oracle announced its $28.3 billion acquisition of electronic medical record firm Cerner.

"Oracle and Cerner jointly announced today an agreement to acquire Cerner in an all-cash offer of $95 per share, with an equity valued at approximately $28.3 billion," Oracle said in the announcement. ”

According to Synergy Research, Oracle could enter the growing vertical of healthcare through the deal, and it could also help support Oracle's fledgling cloud infrastructure business, which is declining at a single-digit rate.

Holger Mueller, an analyst at Constellation Research, said Oracle has a long history of acquisitions, which will be the largest deal in Oracle's history.

"It was Oracle's wise move. It further solidifies the adoption of Oracle's technology in healthcare and brings a lot of current and especially future jobs to oracle cloud, not to mention that Oracle is entering the largest and fastest growing vertical industry in the market," Mueller said.

Oracle CEO Afra Catz certainly did not ignore the growth potential of the market. "As we expand into more countries around the world, Cerner will be a huge additional revenue growth engine for Oracle in the coming years, and that's exactly the growth strategy we adopted when we acquired NetSuite — and even Cerner's revenue opportunities are even greater," she said in a statement.

It's worth noting, however, that when Catz talked about international expansion, Microsoft announced earlier this year that it was acquiring Nuance Communications for $19.7 billion, making a similar attempt in healthcare.

But it's facing headwinds from UK regulators, so it's unclear whether Oracle's deal will face similar regulatory scrutiny as it advances next year.

As for Cerner, David Feinberg, president and CEO who just took over the role in October, saw the opportunity and seized it. Of course, he made the deal in the same way that most CEOs do — Cerner won't be able to expand the market as an independent company.

Feinberg said in a statement: "Joining Oracle as a dedicated industry business unit gives us an unprecedented opportunity to accelerate our electronic health record (EHR) modernization efforts, improve the caregiver experience, and enable more connected, high-quality, and efficient patient care." ”

At present, the announcement is the first in a series of acquisition steps, and it remains to be seen whether it can be successfully completed all the way in the current regulatory environment.

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