Months of speculation officially came to an end Monday as Kansas City-headquartered Cerner announced its exit to Oracle — the global cloud giant’s largest-ever acquisition at $28.3 billion in equity value.
The largest private employer in the Kansas City metro, Cerner’s medical records solutions have developed over the course of four decades into a transformational healthcare powerhouse, the company’s CEO said Monday.
Founded in 1979 by Neal Patterson, Paul Gorup and Cliff Illig, Cerner is a leading provider of digital information systems used within hospitals to enable medical professionals to deliver better healthcare to individual patients and communities.
“Cerner has been a leader in helping digitize medical care and now it’s time to realize the real promise of that work with the care delivery tools that get information to the right caregivers at the right time,” said David Feinberg, CEO and president of Cerner. “Joining Oracle as a dedicated Industry Business Unit provides an unprecedented opportunity to accelerate our work modernizing electronic health records (EHR), improving the caregiver experience, and enabling more connected, high-quality and efficient patient care.
“We are also very excited that Oracle is committed to maintaining and growing our community presence, including in the Kansas City area,” he added.
Cerner and Oracle did not provide further context to its planned local presence, beyond saying it would be leveraged alongside Oracle’s global footprint to reach new geographies faster.
The acquisition news comes about five months after Cerner announced plans to sell its Kansas City, Kansas, campus amid pandemic-era remote work and talent consolidation at its remaining site across the state line in Missouri. It also follows the high-profile departures of Cerner executives to other health tech companies, including well-known startups like Bardavon Health Innovations and Rx Savings Solutions.
Feinberg joined as CEO in August, making headlines in October when he responded publicly to rumors of employee layoffs, confirming a round of 150 layoffs to come in November.
Ryan Weber, president of the KC Tech Council, expressed cautious optimism on Twitter as news of the record Cerner deal broke.
“Large tech acquisitions can be a catalyst for future economic growth,” Weber said in the Tweet. “Let’s hold off judgement, listen to company officials, and then make up our minds. You know, like rational people do.”
The tech advocate then listed a few examples of “cataclysmic tech acquisitions” — ExactTarget (Indianapolis) to Salesforce; Dell (Austin) to EMC; and Redhat (Raleigh, North Carolina) to IBM — while noting, “Of course, they don’t all go in the favor of the hometown.”
Cerner has proven a key partner for the Kansas City region for decades, said Joe Reardon, President and CEO of the Greater Kansas City Chamber of Commerce.
“They are an example of a homegrown business that has seen tremendous global success,” he said. “In fact, the KC Chamber recognized them as the Mr. K Small Business of the Year in 1988 and they have grown to be our region’s largest private employer. Cerner operates in a very competitive and growing market so it is not surprising such a successful company would be sought out by others, especially in a global market.”
Cerner will be Oracle’s anchor asset to expand into healthcare and together the two will improve medical care for individuals and communities around the world, the companies said. And with Oracle’s resources, infrastructure and cloud capabilities, Cerner will accelerate the pace of product and technology development.
“Working together, Cerner and Oracle have the capacity to transform healthcare delivery by providing medical professionals with better information—enabling them to make better treatment decisions resulting in better patient outcomes,” said Larry Ellison, chairman and CTO at Oracle. “With this acquisition, Oracle’s corporate mission expands to assume the responsibility to provide our overworked medical professionals with a new generation of easier-to-use digital tools that enable access to information via a hands-free voice interface to secure cloud applications.”
The transaction — an all-cash tender offer for $95 per share — is expected to close in 2022, pending regulatory approvals and satisfying other closing conditions including Cerner stockholders tendering a majority of Cerner’s outstanding shares in the tender offer.