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Cerner stock rises on potential $30B sale to Oracle

Oracle is reportedly in talks to buy Cerner for $30 billion, according to the Wall Street Journal. If it closes, it would be the largest health tech deal this year. 

Oracle is reportedly in talks to buy Cerner, according to the Wall Street Journal. Citing people familiar with the matter, the Wall Street Journal reported that the deal, which could be worth about $30 billion, could be finalized soon. 

Cerner is valued at about $23 billion. News of the deal led its stock to rise about 14% on Friday, to about $90.92 at market open.

The Kansas City- based electronic health records company saw business slow during the pandemic, though bookings have rebounded in recent months. The company is currently in the process of deploying its records system as part of a contract with the Department of Defense, which Cerner said is on track to finish by 2023.

Its $16 billion contract with the Department of Veterans Affairs, on the other hand, is expected to resume early next year, after federal watchdogs found billions in unreported costs and the VA conducted a strategic review of the project.  

In September, Dr. David Feinberg joined the company as its CEO, after a two-year stint leading Google’s healthcare efforts. 

As demand for new EHR installations slows, Cerner has been positioning itself for more work in data analytics. Last year, it acquired Kantar Health, which it is folding into its new Cerner Enviza unit, focused on clinical trial research. In the company’s third-quarter earnings call, CFO Mark Erceg said he expects it to bring in $130 million in full year revenue. 

At the same time, Cerner has also taken to cost cutting, going through a round of layoffs this year and looking for a buyer for two of its offices.

If the buyout closes, it would be the biggest healthcare technology deal in a busy year. Competitor Athenahealth recently stuck a $17 billion deal to go private through two private equity firms, Bain Capital and Hellman & Friedman.

Big tech companies are also using acquisitions to add to their healthcare businesses. For example, Microsoft bought Nuance for $19.7 billion, using its voice assistant software to make health records less burdensome for clinicians. 

Photo: designer491, Getty Images

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