Cerner Corporation and Siemens AG have signed a definitive agreement for Cerner to acquire the assets of Siemens' health information technology business unit, Siemens Health Services, for $1.3 billion in cash. By combining investments in R&D, knowledgeable resources, and complementary client bases, the acquisition creates scale for future innovation. As part of the agreement, Cerner and Siemens will form a strategic alliance to bring new solutions to market that combine Cerner's health IT leadership and Siemens' strengths in medical devices and imaging.
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 healthcare organisations in their respective countries; $4.5 billion of annual revenue; and $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 amortisation and deferred revenue adjustments.
Cerner has a 35-year history of creating value for clients by providing innovative solutions and services that help healthcare providers around the world increase safety, improve quality and reduce waste. Cerner is well-positioned to help clients be leaders in healthcare delivery and population health management. The company's competitive market position, combined with significant investments in R&D, understanding of advances in science and IT, as well as healthcare regulatory and industry shifts, enable it to help clients succeed.
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.
Cerner and Siemens will create a strategic alliance to jointly invest in innovative projects that integrate health IT with medical technologies for the purpose of enhancing workflows and improving clinical outcomes. Each company will contribute up to $50 million to fund projects of shared importance to both companies and their clients.
The alliance has a three-year initial term. Advanced workflows along with medical images and their unique role in diagnostic and therapeutic decision-making, will be an early focus of the joint work.
