Cerner Corporation and Siemens AG have announced that they have entered into a definitive agreement for Cerner to acquire Siemens' health IT business unit, Siemens Health Services, for $1.3 billion in cash.
The two companies will have a combined total of $4.5 billion annual revenue, $650 million in annual research and development investment, 20,000 associates in more than 30 countries and 18,000 client facilities worldwide.
>> RELATED: Analysts weigh in on the deal
"We believe this is an all-win situation for the clients of both organizations and all of our associates and shareholders," Neal Patterson, Cerner chairman, CEO and co-founder, said in a statement. "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' health care 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 inside advanced diagnostic and therapeutic technologies, benefiting our shared clients."
The acquisition will help Cerner compete with other health IT giants such as Epic Systems, according to an article in Forbes. Cerner, along with Epic, has been edging out other vendors when it comes to the number of contracts they have with hospitals.
Cerner has joined forces with Leidos and Accenture to vie for the lucrative Department of Defense EHR contract; that request for proposal is expected to be released within the coming months. Epic has teamed up with IBM for that contract.
To learn more:
- read the announcement
- here's the Forbes article