Since 2005, Chairman and former CEO, Larry Ellison has led Oracle to spend at least $1 billion on an acquisition in only 15 deals. Seven of those deals went over $5 billion.
But Oracle’s rivals have long used big acquisitions to stay relevant and push into new markets. Microsoft, for instance, announced plans to buy Nuance Communications for $16 billion.
The all-cash deal for Cerner is a hefty price to pay, despite its strong stock appreciation. At the end of last quarter, Oracle reported $23 billion in cash. But Oracle will not have to go into debt to finance the $28.3 billion deal, an unnamed source told CNBC.
Most modern subscription software businesses are high-growth, but not Cerner. It’s annual growth rate hasn’t reached double digits since 2015 and sales shrank in 2020. Despite its slow growth, Cerner expects to generate $1 billion in net income by the end of 2021.
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
