Oracle in talks to buy Cerner
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Oracle Corp. is in talks to buy electronic-medical-records company Cerner Corp. , according to people familiar with the matter, a deal that could be worth around $30 billion and push the enterprise-software giant further into healthcare.
An agreement could be finalized soon, some of the people said, assuming the talks don’t fall apart or drag out. Should a deal come together, it would rank as the biggest ever for Oracle, which has a market value of more than $280 billion.
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Kansas City, Mo.-based Cerner designs software that hospitals and doctors use to store and analyze medical records and other healthcare data. It has a market value of around $23 billion. With a typical takeover premium, a deal would be expected to value the company at something like $30 billion, though exact terms being discussed couldn’t be learned.
Oracle, a Silicon Valley veteran that last year moved its headquarters to Austin, Texas, is one of the biggest software providers to other companies and organizations.
In August, Cerner tapped David Feinberg as chief executive officer, a role he assumed in October. Mr. Feinberg came from Oracle rival Google, where he had led the Alphabet Inc. unit’s push into healthcare and helped strike partnerships with some of the country’s largest hospital systems to collect and analyze their data.
Oracle already has a significant presence in healthcare, offering technology meant to help health insurers, healthcare providers and public health systems parse data to increase efficiency and improve patient outcomes.
Oracle shares closed Thursday at $103.22, down slightly amid a broad-based tech selloff and just off an all-time high reached the day before. They jumped over 15% last week when the company reported fiscal-second-quarter results that topped estimates and Chief Executive Safra Catz reiterated the expectation that full-year revenue growth would accelerate from the year earlier. Ms. Catz, who became the sole CEO in 2019, said she expects the company’s operating margins to be the same or better than they were pre-pandemic.
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The company also increased the authorization for share repurchases by $10 billion.
Buying Cerner could help Oracle with its pivot toward the cloud. Investors have warmed to Oracle as the company ramps up its focus on winning cloud-computing business, after initially being slow to embrace the booming market for storing and analyzing data on remote servers. Oracle has been trying to make up ground in recent years after falling behind companies such as Amazon.com Inc. and Microsoft Corp. , which both now have market values well exceeding $1 trillion thanks in part to thriving cloud units.