On August 5, Cerner announced its intent to acquire Siemens Health Services (HS) for $1.3B in cash, slightly more than Siemens HS’s FY14 revenue of $1.2B. The deal brings to Cerner a large, relatively stable base of 600-700 hospital customers in the US for upsell opportunities. The acquisition also provides Cerner with a head start in many international markets – an area that will become increasingly important for US-based EHR vendors as the US acute care market is reaching maturity.
This is a risky move by Cerner, a company not known for making large acquisitions and large IT-centric acquisitions in any vertical are fraught with risk. But if they are successful in migrating Siemens clients, overtime, to Cerner solutions, as well as capitalizing on near-term upselling of Siemens’ clients on Cerner’s more EHR agnostic solutions, e.g. HealtheIntent, Cerner will have made a very savvy move in this market that is poised for significant consolidation.