Cerner buys Siemens health IT unit for $1.3B

Modern Healthcare - - NEWS - By John N. Frank and Dar­ius Tahir

To pre­pare for pop­u­la­tion health man­age­ment, elec­tronic health-record de­vel­oper Cerner Corp. is spend­ing $1.3 bil­lion to pur­chase Siemens Health Ser­vices, the health in­for­ma­tion tech­nol­ogy busi­ness of Ger­many’s Siemens AG, Cerner an­nounced last week.

The newly com­bined com­pany will have $4.5 bil­lion in an­nual rev­enue and will in­vest $650 mil­lion an­nu­ally in re­search and devel­op­ment, Kansas City, Mo.-based Cerner said. Its client base will in­clude 18,000 fa­cil­i­ties in the U.S. and Ger­many.

The deal also calls for Cerner and Siemens to 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,” the Cerner an­nounce­ment said.

“The al­liance we’re cre­at­ing will drive the next gen­er­a­tion of in­no­va­tions that em­bed in­for­ma­tion from the (EHR) in­side ad­vanced di­ag­nos­tic and ther­a­peu­tic tech­nolo­gies, ben­e­fit­ting our shared clients,” said Neal Pat­ter­son, Cerner’s CEO.

The two com­pa­nies plan to in­vest $50 mil­lion each in the al­liance, which will have a three-year ini­tial term and mar­ket world­wide, Cerner said, adding that the ac­qui­si­tion would help po­si­tion the firm for the “post-mean­ing­ful-use era.”

Siemens Health Ser­vices’ ex­pe­ri­ence with rev­enue-cy­cle man­age­ment prod­ucts could help Cerner evolve with the health­care IT mar­ket’s need for such of­fer­ings.

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