Financial Information ($USD)

• Enterprise Value: $28.3 Billion
• EV/LTM Revenue: 8.12x
• EV/LTM EBITDA: 17.71x

 Transaction Details

• Oracle (NYSE: ORCL) today announced an agreement to acquire Cerner Corporation (NASDAQ: CERN) through an all-cash tender offer for $95.00 per share, or approximately $28.3 billion in equity value.
• Cerner is a leading provider of digital information systems used within hospitals and health systems to enable medical professionals to deliver better healthcare to individual patients and communities.
• The Transaction is expected to close in calendar year 2022, subject to receiving certain regulatory approvals and satisfying other closing conditions including Cerner stockholders tendering a majority of Cerner’s outstanding shares in the tender offer.
• Cerner will be organized as a dedicated Industry Business Unit within Oracle and will be Oracle’s anchor asset to expand into healthcare.

 martinwolf Analysis

• Greater than NetSuite: Oracle is employing the same growth strategy it used when it acquired NetSuite. The company plans to expand Cerner’s business into countries throughout the world, creating an additional revenue growth engine. Oracle CEO Safra Catz mentioned one significant difference, “The Cerner revenue opportunity is even larger.”
• Accretive Value: Oracle noted that the acquisition, which is the largest in company history, will be immediately accretive to the company’s earnings on a non-GAAP basis in the first full fiscal year after closing. From a strategic standpoint, this means Oracle expects significant performance from Cerner in the years to come.
• M&A Surge: This transaction pairs a major player in the technology space and the healthcare space, which is reflective of global M&A overall in 2021. Technology and Healthcare led the way for a record-breaking $5 trillion year in global M&A.
• Well Balanced: Oracle, which dominates the financial services vertical, has now made a focused move into the fast-growing health IT vertical. This deal will enhance Oracle’s cloud infrastructure business, which has been underperforming relative to its competitors, and create more incremental opportunities to its channel partners.
• Market Response: Oracle shares were down just over 2% Monday morning following the official announcement. After the Wall Street Journal first reported the deal on Friday Oracle’s shares were down 6%.

For more information about this transaction, click here to read the press release from Oracle.

*Financial information from the press release and FactSet.

martinwolf was not the advisor in this transaction.