Cerner shares jump after reports of possible Oracle takeover

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Cerner’s shares jumped Friday morning following reports that the electronic health record giant could be acquired by Oracle, a cloud applications company.

Cerner’s shares opened at $90.92 on Friday after closing at $79.49 on Thursday.

Oracle’s shares dropped on the news, opening at $97.69 on Friday after closing at $103.22 on Thursday.

Oracle is reportedly in talks to purchase Cerner, according to a report the Wall Street Journal published Friday evening, citing people familiar with the matter. The deal, which reportedly could be finalized soon, would be Oracle’s largest acquisition to date—beating a roughly $10 billion price tag that Oracle paid for enterprise software company PeopleSoft in 2005.

The Wall Street Journal estimated that a deal to take over Cerner would likely be valued at around $30 billion, based on the company’s market value.

Oracle and Cerner did not immediately respond to requests for comment from Modern Healthcare.

Cerner, which sells EHR systems and other enterprise software to healthcare organizations including the Veterans Affairs Department, could support Oracle’s healthcare product portfolio, which already includes tools it sells to insurers, providers and public health systems. Cerner, like other EHR vendors, in recent years has sought to diversify its business with tools and services that leverage patient data.

Cerner’s top competitor in the EHR space is Epic Systems, with Epic accounting for 31% of the U.S. hospital market last year, followed by Cerner at 25%.

Cerner in August announced Dr. David Feinberg, who previously led Google Health, as the company’s new chief executive officer. Feinberg has said he wants Cerner to focus on developing tools that make EHRs—frequently cited as a driver of physician burnout—easier to use and outfitting them with analytics tools that support patient care.

Cerner posted $1.5 billion in revenue for 2021’s third quarter, up 7.2% year-over-year, and $224.9 million in operating earnings, down from $411.8 million in the year-ago period.

Oracle reported $10.4 billion in revenue for the second quarter of its fiscal 2022, its most recently reported period, up 5.7% year-over-year. The company reported a $824 million operating loss for the quarter, compared to $3.6 billion in operating income reported in the same period of its fiscal 2021.

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