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.
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