Seeking Alpha

Cerner buying Siemens Health Services for $1.3B

  • Cerner (NASDAQ:CERN) is acquiring Siemens' (OTCPK:SIEGY) healthcare IT unit for $1.3B in cash. The deal is expected to close in Q1 2015, and be financed with cash on hand.
  • The purchase is expected to boost Cerner's 2015 EPS by more than $0.15, and its 2016 EPS by more than $0.25. Cerner and the Siemens unit are expected to have $4.5B in 2014 sales between them.
  • Cerner CEO Neal Patterson: "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." He also sees opportunities to integrate EMR data with "advanced diagnostic and therapeutic technologies."
  • As part of the deal, Cerner and Siemens will partner on projects that "integrate health IT with medical technologies for the purpose of enhancing workflows and improving clinical outcomes." The alliance has an initial 3-year term; each company will contribute up to $50M.
  • CERN +0.5% AH.
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