Cerner could be acquired by Oracle, says WSJ

The Wall Street Journal reports that Oracle may be interested in acquiring health IT giant Cerner Corp., and that the two companies are negotiating a potential $30 billion deal.

The paper claims that “people familiar with the matter” say an “agreement could be finalized soon…assuming talks don’t fall apart or get out of hand”.

A Cerner spokesperson did not respond to a request for comment.

While Oracle has a presence in healthcare, an acquisition of this magnitude would represent a significant investment in the future of healthcare technology, especially cloud computing and artificial intelligence.

WSJ notes that a $30 billion acquisition would be the company’s largest ever — three times the size of its next largest deal (the $10 billion purchase of PeopleSoft 16 years ago).

Oracle has taken a big step to build out its cloud computing power, and an acquisition of Cerner would be another step in that direction

“Investors have grown excited about Oracle as the company ramps up its focus on winning cloud computing business after it was initially slow to embrace the booming market for storing and analyzing data on remote servers,” write Cara Lombardo and Dana Cimilluca in the statement. WSJ article.

If the acquisition were to happen, it would be the second recent example of a legacy tech giant spending a lot of money on a healthcare-focused player with deep cloud and AI expertise. Microsoft bought Nuance for $20 billion last April, after years of working together on projects.

It would also be another recent example of the acquisition of a major electronic healthcare provider — following news last month that cloud IT company athenahealth would be bought for $17 billion by a pair of private equity firms.

The past year has been marked by some major changes at Cerner. The biggest, of course, was the arrival of Dr. David Feinberg, who most recently led Google Health, became the company’s new chief executive officer in August.

But it was also a challenging year for the company, with layoffs and ongoing setbacks disrupting Cerner’s work on the EHR modernization project at the VA.

Still, in the company’s Q3 earnings call six weeks ago, Feinberg said he is “wildly optimistic about our long-term growth prospects.”

He added: “As far as organic vs M&A, I’m still on the cutting edge. One of the rules I have is to really learn more about the organization before we make big strides. And I’ve had a team that quickly informed me. So we continue to evaluate what is there.”

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