Cerner Corporation: Cerner to Acquire Siemens Health Services for $1.3 Billion
Acquisitionto further industry innovation with a combined $650 million
annual R&D investment
Complementary client bases expand global presence
Cerner and Siemens AG to combine strengths to deliver new solutions through
$100 million strategic alliance
KANSAS CITY, Mo., Aug. 5, 2014 (GLOBE NEWSWIRE) -- Cerner Corporation
(Nasdaq:CERN) and Siemens AG today announced they 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.
"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. "Through more than $4
billion of cumulative investments in R&D, Cerner has established a strong
market standing and is positioned for continued growth. 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. In addition, the alliance we're creating will
drive the next generation of innovations that embed information from the EMR
inside advanced diagnostic and therapeutic technologies, benefitting our
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. "Siemens
cares deeply about its clients and believes Cerner is the best organization
to fully support their health IT needs going forward. The knowledge and
strength of our combined resources opens up great possibilities for future
collaboration and development, which is exciting for all of us. And our
clients will benefit from our alignment with a company that has such a
strong historical and future commitment to rapid innovation."
Cerner has a 35-year history of creating value for clients by providing
innovative solutions and services that help health care providers around the
world increase safety, improve quality and reduce waste. Cerner is
well-positioned to help clients be leaders in health care delivery and
population health management today and tomorrow. The company's competitive
market position, combined with significant investments in R&D, understanding
of advances in science and IT, as well as health care regulatory and
industry shifts, enable it to help clients succeed.
"We have tremendous respect for Siemens' clients, their markets and their
needs," said Patterson. "We look forward to bringing them into the Cerner
family, especially as they face increasingly complex clinical and regulatory
environments, with mandates to improve quality and pressures to lower cost.
We pride ourselves on helping clients navigate changing times so they can be
leaders in providing care to their communities. We're committed to
supporting Siemens' clients, and we want them to have confidence that we
have the vision, scale and resources to help them achieve their plans for
building their organizations' futures."
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.
"Siemens is very innovative around imaging, diagnostic and therapeutic
technologies and processes," said Patterson. "Medical technologies generate
mountains of images and other data that must be stored, accessed, visualized
and interpreted intelligently. In addition, advanced diagnostic and
therapeutic processes are enhanced by presenting EMR data at just the right
moment and in the right context. Together we will innovate at the edge where
IT, processes and technologies meet."
Cerner intends to finance the acquisition with cash on hand. The acquisition
is expected to close in the first quarter of 2015, subject to regulatory
approval and other customary conditions. The transaction has been approved
by the boards of Cerner and Siemens.
Greenhill & Co. is acting as financial advisor to Cerner, and Latham &
Watkins LLP is acting as its legal counsel. JP Morgan is acting as financial
advisor to Siemens, and Clifford Chance LLP is acting as its legal advisor.
Cerner will host a conference call for the investment community to discuss
the acquisition at 4p.m. CT on Tuesday, Aug. 5. The dial-in number for the
conference call is (617) 614-4909; the passcode is Cerner. Cerner recommends
joining the call 15 minutes early for registration. The re-broadcast of the
call will be available from 8 p.m. CT, Aug. 5 through 11:59 p.m. CT, Aug.
12. The dial-in number for the re-broadcast is (617) 801-6888; the passcode
A webcast and slides that will be discussed on the call will be available on
Cerner's website at www.cerner.com under the About Cerner section (click
Investor Relations, then Presentations and Webcasts).
Cerner's health information technologies connect people, information, and
systems, at approximately 14,000 facilities worldwide. Recognized for
innovation, Cerner solutions assist clinicians in making care decisions and
enable organizations to manage the health of populations. The company
provides clients with a wide range of in-house services, as well as an
integrated clinical and financial system to help organizations manage
revenue. Cerner's mission is to contribute to the systemic improvement of
health care delivery and the health of communities. (Nasdaq:CERN) For more
information about Cerner, please visit www.cerner.com, check out our blog at
www.cerner.com/blog and connect with us on Twitter at
http://www.twitter.com/cerner and on Facebook at www.facebook.com/cerner.
Certain trademarks, service marks and logos set forth herein are property of
Cerner Corporation and/or its subsidiaries. All other non-Cerner marks are
the property of their respective owners.
All statements in this press release that do not directly and exclusively
relate to historical facts constitute forward-looking statements. Statements
relating to the expected benefits of the proposed transaction and Cerner's
post-transaction plans, objectives, expectations and intentions are examples
of such forward-looking statements. These forward-looking statements are
based on the current beliefs, expectations and assumptions of Cerner's
management with respect to future events and are subject to a number of
significant risks and uncertainties. It is important to note that Cerner's
performance, and actual results, financial condition or business could
differ materially from those expressed in such forward-looking statements.
In many instances, the words "plans," "estimates," "intends," "believe,"
"position," "expects," "will" or the negative of these words, variations
thereof or similar expressions are intended to identify such forward-looking
statements. Factors that could cause or contribute to such differences
include, but are not limited to: risks inherent with business acquisitions
and integrations such as difficulties and operational and financial risks
associated with integrating Cerner and the acquired business; the occurrence
of any event, change or other circumstances that could give rise to the
termination of the transaction agreements; the risk that the necessary
regulatory approvals may not be obtained in a timely manner or may be
obtained subject to conditions that are not anticipated; the risk of
uncertainty as to timing of the consummation of the acquisition; risks that
any of the closing conditions to the proposed transaction may not be
satisfied or may not be satisfied in a timely manner; risks related to
disruption of management time from ongoing business operations due to the
proposed transaction; failure to realize the synergies and other benefits
expected from the proposed transaction; risk that the assets and business
acquired may not continue to be commercially successful; the effect of the
announcement of the proposed transaction and the transaction itself on the
ability of Cerner to retain customers and retain and hire key personnel and
maintain relationships with key suppliers; unexpected costs, charges or
expenses resulting from the transaction; and litigation or claims relating
to the transaction or the acquired assets and business.Additional
discussion of other risks, uncertainties and factors affecting Cerner's
business is contained in Cerner's filings with the Securities and Exchange
Commission. The reader should not place undue reliance on forward-looking
statements, since the statements speak only as of the date that they are
made. Cerner undertakes no obligation to update forward-looking statements
to reflect changed assumptions, the occurrence of unanticipated events or
changes in future operating results, financial condition or business over
CONTACT: US Media:
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+44 (0)77 8978 1815
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Source: Cerner Corporation via Globenewswire
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