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Cerner to acquire Siemens health IT division for $1.3B

Dive Brief:

  • Fulfilling some ongoing industry rumors, EHR giant Cerner will acquire the IT division of German corporation Siemens in a deal worth $1.3B.
  • Combined with the Siemens business, Cerner will now have 20,000 associates in over 30 countries, and 18,000 facilities as clients.
  • The acquisition will increase Cerner’s annual revenue from about $3 billion last year to more than $4.5 billion in annual revenue this year. This makes Cerner the number-one vendor in revenue, over a billion dollars larger than previous industry leader McKesson, according to Vince Ciotti on HIStalk. Epic is now in third place, with $1.7B in revenue.

Dive Insight:

According to Cerner founder Neal Patterson, scale was an important consideration in the deal. “This gets us a bigger, better business platform,” Patterson said. “We’ll have a combined $650 million [in R&D] spend and we think the future of healthcare computing is driven around the ability to innovate. This preserves our ability to spend heavily in innovation and IT certainly for the rest of this decade.”

Moreover, says Patterson, the secret to securing a future in the healthcare industry is being able to manage and interpret huge streams of data to determine population health. “The next [thing] … is through big data to be able [to] identify and manage health conditions before people present themselves to hospitals and emergency rooms,” Patterson said.

When Healthcare Dive reported on the rumors of a Siemens acquisition last month, we noted that the purchase would help Cerner battle for market share against fellow EMR titan Epic Systems. Siemens’ EMR may not have a huge market share, but it does have large customers, and Siemens Healthcare has an extremely strong brand in other critical areas of healthcare technology investment, such as medical devices.

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