News | August 06, 2014

Cerner to Acquire Siemens Health Services for $1.3 Billion

August 6, 2014 — Cerner Corp. and Siemens AG announced the signing of a definitive agreement for Cerner to acquire the assets of Siemens' health information technology business unit, Siemens Health Services, for $1.3 billion in cash. By combining investments in R&D, knowledgeable resources and complementary client bases, the acquisition creates scale for future innovation. As part of the agreement, Cerner and Siemens will form a strategic alliance to bring new solutions to market that combine Cerner's health IT leadership and Siemens' strengths in medical devices and imaging. The acquisition does not include Siemens’ imaging informatics business.

"We believe this is an all-win situation for the clients of both organizations and all of our associates and shareholders," said Neal Patterson, Cerner chairman, CEO and co-founder. "Through more than $4 billion of cumulative investments in R&D, Cerner has established a strong market standing and is positioned for continued growth. Siemens' healthcare IT assets provide additional scale, R&D, an impressive client base, and knowledgeable and experienced associates who will help Cerner achieve our plans for the next decade. In addition, the alliance we're creating will drive the next generation of innovations that embed information from the EMR [electronic medical record] inside advanced diagnostic and therapeutic technologies, benefitting our shared clients.

The transaction is expected to be more than $0.15 accretive to Cerner's non-GAAP diluted EPS in 2015, and more than $0.25 accretive in 2016. Non-GAAP earnings are expected to exclude share-based compensation expense, one-time transaction costs, and acquisition-related amortization and deferred revenue adjustments.

"We are excited to join with one of the most competitive companies in health IT today, and a recognized leader in innovation," said John Glaser, Ph.D., CEO of the Health Services business unit of Siemens Healthcare. "Siemens cares deeply about its clients and believes Cerner is the best organization to fully support their health IT needs going forward. The knowledge and strength of our combined resources opens up great possibilities for future collaboration and development, which is exciting for all of us. And our clients will benefit from our alignment with a company that has such a strong historical and future commitment to rapid innovation."

"We have tremendous respect for Siemens' clients, their markets and their needs," said Patterson. "We look forward to bringing them into the Cerner family, especially as they face increasingly complex clinical and regulatory environments, with mandates to improve quality and pressures to lower cost. We pride ourselves on helping clients navigate changing times so they can be leaders in providing care to their communities. We're committed to supporting Siemens' clients, and we want them to have confidence that we have the vision, scale and resources to help them achieve their plans for building their organizations' futures."

Following the acquisition, support for Siemens Health Services’ core platforms will remain in place. Current implementations will continue, and Cerner plans to support and advance the Soarian platform for at least the next decade. Cerner will work with all clients to support their short-term and long-term business needs.

Global Alliance

Cerner and Siemens will create a strategic alliance to jointly invest in innovative projects that integrate health IT with medical technologies for the purpose of enhancing workflows and improving clinical outcomes. Each company will contribute up to $50 million to fund projects of shared importance to both companies and their clients.

The alliance has a three-year initial term. Advanced workflows, along with medical images and their unique role in diagnostic and therapeutic decision-making, will be an early focus of the joint work.

Transaction Summary

Cerner intends to finance the acquisition with cash on hand. The acquisition is expected to close in the first quarter of 2015, subject to regulatory approval and other customary conditions. The transaction has been approved by the boards of Cerner and Siemens.

Greenhill & Co. is acting as financial advisor to Cerner, and Latham & Watkins LLP is acting as its legal counsel. JP Morgan is acting as financial advisor to Siemens, and Clifford Chance LLP is acting as its legal advisor.

For more information: www.cerner.com

Related Content

Logicalis Healthcare Solutions, Epic service desk, HIMSS17
News | Electronic Medical Records (EMR) | March 06, 2017
March 6, 2017 — Logicalis Healthcare Solutions announced in February a new service desk offering – Service Desk for E
HIMSS Leadership and Workforce Survey, HIMSS17, electronic medical records, EMR, health information technology
News | Electronic Medical Records (EMR) | February 21, 2017
A new study from the Healthcare Information and Management Systems Society (HIMSS), unveiled at the 2017 HIMSS...
ECG, heartbeat, password access, electronic health records, Binghamton University SUNY study, Zhanpeng Jin
News | Electronic Medical Records (EMR) | January 26, 2017
Researchers at Binghamton University, State University of New York have devised a new way to protect personal...
AMA, American Medical Association study, EMRs, electronic medical records, physician burnout
News | Electronic Medical Records (EMR) | September 07, 2016
Technological and administrative obstacles are significantly cutting into available time for physicians to engage with...
IBISWorld, electronic medical records, EMR software, price, market report

Image courtesy of IBISWorld

News | Electronic Medical Records (EMR) | June 07, 2016
According to market research firm IBISWorld, the average price of electronic medical record (EMR) software is forecast...
ONC, survey, electronic health records, adoption, 2015
News | Electronic Medical Records (EMR) | June 03, 2016
According to data from a new survey, nearly all of the nation’s hospitals have adopted certified electronic health...
CMS, Meaningful Use replacement, Meaningful Outcomes, JPM16
News | Electronic Medical Records (EMR) | January 15, 2016
The Centers for Medicare and Medicaid Services (CMS) announced Monday that it will be ending the Meaningful Use program...
Overlay Init