Cerner to acquire Siemens Health Services for $1.3B

Cerner announced Tuesday afternoon it will acquire Siemens' health technology division for $1.3 billion cash.

"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, in a news release. "Through more than $4 billion of cumulative investments in research and development, Cerner has established a strong market standing and is positioned for continued growth. Siemens' healthcare 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."

Part of the acquisition agreement is the formation of a strategic alliance between the companies to use their respective strengths, Cerner's health IT expertise and Siemens' medical device and advanced imaging capabilities, to develop new products and solutions. The two companies currently have a combined annual R&D investment of about $650 million, and each company will invest up to $50 million more toward jointly developing new products.

The acquisition is expected to raise Cerner's annual revenue to $4.5 billion, up from about $3.3 billion currently. The transaction is expected to close in the first quarter of 2015, pending regulatory approval.

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