KANSAS CITY, Mo. – Health information technology company Cerner Corp. is buying the health information technology business unit of German industrial conglomerate Siemens AG for $1.3 billion in cash.
The two companies announced the deal on Tuesday.
Both companies’ boards have approved the proposed deal, which is expected to close in the first three months of 2015.
As part of the pact, Cerner and Siemens agreed to team up for at least three years to develop new products or services in the field of medical technology.
“We believe this is an all-win situation for the clients of both organizations and all of our associates and shareholders,” said Neal Patterson, Cerner chairman, CEO and co-founder.
Based on 2014 estimates, Cerner and Siemens Health Services have combined totals of more than:
• 20,000 associates in more than 30 countries
• 18,000 client facilities, including some of the largest health care organizations in their respective countries
• $4.5 billion of annual revenue
• $650 million of annual R&D investment
The transaction is expected to be more than $0.15 accretive to Cerner’s non-GAAP diluted EPS in 2015, and more than $0.25 accretive in 2016. Non-GAAP earnings are expected to exclude share-based compensation expense, one-time transaction costs, and acquisition-related amortization and deferred revenue adjustments.
“We are excited to join with one of the most competitive companies in health IT today, and a recognized leader in innovation,” said John Glaser, Ph.D., CEO of the Health Services business unit of Siemens Healthcare.
Following the acquisition, support for Siemens Health Services core platforms will remain in place. Current implementations will continue, and Cerner plans to support and advance the Soarian platform for at least the next decade. Cerner will work with all clients to support their short-term and long-term business needs.