That bombshell came in fast! From the rumor mill to reality, from last Thursday to today (Monday), Oracle and Cerner announced their deal today at 9.37am ET. It is a bracing all-cash deal at $95/share plus debt assumption totaling $28.3 billion, expected to be immediately accretive to Oracle’s earnings. Closing is anticipated sometime in 2022. It is subject to considerable regulatory (SEC and likely DOJ) and shareholder approvals. It’s Oracle’s largest deal ever, but so far their share price is not appreciative of the big move.
According to the Oracle release, Cerner and its EHR plus related systems will be organized as a dedicated Industry Business Unit within Oracle. No transition information was included, although towards the end it’s stated that “Oracle intends to maintain and grow Cerner’s community presence, including in the Kansas City area, while utilizing Oracle’s global footprint to reach new geographies faster.”
Both the Oracle and Cerner releases (headlining their home page in gigantic type) are written totally from Oracle’s POV–no shilly-shallying about how Cerner will guide them into the healthcare arena or a meeting of like companies, et al. It’s all about how Oracle will transform healthcare.
Changes will be coming to Cerner. Between the lines, they are not painted in the best light. From the Mike Cecelia (EVP, Vertical Industries) quote, “Oracle’s Autonomous Database, low-code development tools, and Voice Digital Assistant user interface enables us to rapidly modernize Cerner’s systems and move them to our Gen2 Cloud. This can be done very quickly because Cerner’s largest business and most important clinical system already runs on the Oracle Database. No change required there. What will change is the user interface. (Ed. emphasis) We will make Cerner’s systems much easier to learn and use by making Oracle’s hands-free Voice Digital Assistant the primary interface to Cerner’s clinical systems. This will allow medical professionals to spend less time typing on computer keyboards and more time caring for patients.”
There is also no mention of Cerner’s challenges with the VA. What are the implications with the Cerner implementations there and with DOD?
Do anticipate much industry speculation on David Feinberg, MD, who only this fall joined Cerner as CEO, and his role in this. The most logical is that he’ll shepherd the sale till the close and exit stage left, well-rewarded, with his future (only 59) still ahead, unless Oracle sees a role for him. In its way, it broke Cerner out of a corner that they were painted into with EHRs. At the end of the day, will there be a Cerner?
And what about Epic? A more complex picture, as Epic Systems is wholly private, on a roll, and dominated by Judy Feinberg, the founder and CEO. However, she is 78, and both personal and corporate considerations on future planning must loom large. What would Epic be worth to an acquirer? And who would it be? Amazon? IBM? (a terrible fit after the Watson Health debacle), Salesforce? Microsoft? Hmmmmm…. CNBC, TechCrunch, HealthcareITNews Our earlier coverage here.