Cerner completes purchase of Siemens Health Services

Cerner Corporation has wrapped up its acquisition of Siemens Health Services, Siemens AG's health IT business unit, and plans to use its now combined annual research and development investment of $650 million to "speed delivery" of the "next generation of Heath IT solutions," the Kansas City, Missouri-based company revealed this week.

The purchase price for the acquisition, announced Feb 2, was $1.3 billion, plus working capital adjustments. Cerner expects revenue in 2015 to be $4.8 billion to $5 billion, slightly higher than the $4.5 billion predicted when the deal was announced last August. The client base now spans more than 30 countries across more than 18,000 facilities.

"By combining client bases, investments in R&D and associates, we are in a great position to lead clients through one of the most dynamic eras in healthcare," Neal Patterson, Cerner chairman, CEO and co-founder, said in the announcement. "Cerner remains focused on key development areas including population health, physician experience, open platforms, revenue cycle and mobility. We see these as critical areas of investment to ensure providers can meet growing regulatory demands and control costs, while continuing to improve quality of care."

Cerner also is aligning with Siemens AG, the former parent of Siemens Health Services, to pair Cerner's health IT with Siemens device and imaging expertise. They will invest up to $50 million in an initial three year term, with an early focus on integrating diagnostics and therapeutics into the EHR as well as advancing interoperability of EHRs and medical devices.

The former acquisition helps Cerner compete with other health IT giants such as Epic Systems and puts Cerner ahead in terms of the number of hospital clients. Cerner and Epic have been edging out other vendors when it comes to the number of contracts they have with hospitals.

Cerner--with partners Leidos, Intermountain Healthcare and Accenture--is also competing with Epic and other bidders for the coveted Department of Defense EHR contract. Epic has teamed up with IBM and Impact Advisors for that contract. The contract award will be announced later this year.

To learn more:
- read the announcement