Cerner Corp to Acquire Siemens Health Services in $1.3 Billion Deal

August 6, 2014

Challenges in healthcare reform cited as part of the reason for sale.

Citing an “agreement on strategic alliance,” Siemens plans to sell Siemens Health Services, its hospital information system business to Cerner Corporation, the health information technology giant, for $1.3 billion, the companies announced yesterday.

The newly combined company will boast $4.5 billion of annual revenue, 18,000 client facilities worldwide and $650 million annually to invest in research and development, according to a release. The acquisition is an effort to create scale for future innovation, Cerner announced in a release. Part of the agreement includes a strategic alliance that combines Cerner’s health IT leadership and Siemens’ strengths in medical devices and imaging to bring new solutions to the market, Cerner announced.

“We believe this is an all-win situation for the clients of both organizations and all of our associates and shareholders,” Neal Patterson, Cerner chairman and CEO and co-founder, said in a release.[[{"type":"media","view_mode":"media_crop","fid":"26786","attributes":{"alt":"","class":"media-image media-image-right","id":"media_crop_6567040095106","media_crop_h":"0","media_crop_image_style":"-1","media_crop_instance":"2536","media_crop_rotate":"0","media_crop_scale_h":"0","media_crop_scale_w":"0","media_crop_w":"0","media_crop_x":"0","media_crop_y":"0","style":"float: right; border-width: 0px; border-style: solid; margin: 1px;","title":" ","typeof":"foaf:Image"}}]]

“In the recent years, we have continuously invested in our [Health Services]-portfolio and achieved a significant progress on the technology side. At the same time, we realized that business success of our hospital information systems could not always keep pace with our competition,” Hermann Requardt, CEO of Siemens Healthcare, said in a release. “Additionally an increasing number of country-specific requirements, such as resulting from US healthcare reform, make it increasingly challenging to achieve sufficient scale effects.”

Cerner prides itself on providing innovative solutions and services that increase safety, improve quality and reduce waste. Cerner has a competitive market position as a result of significant investments in research and development, understanding of advances in science and IT and healthcare regulatory and industry shifts, Cerner said in a release.

“The knowledge and strength of our combined resources opens up great possibilities for future collaboration and development,” John Glaser, PhD, CEO of the Health Services business unit of Siemens Healthcare, said in a release.

The acquisition is set to close during the first quarter of calendar year 2015, according to Siemens. Cerner has announced that support for Siemens Health Services core platforms will remain in place and current implementations will continue. Cerner plans to support and advance the Soarian platform, Siemens Health Service’s healthcare information system, for at least the next decade.