Cerner acquires Malvern-based Siemens Health Services for $1.3 billion

Tom Paine

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Cerner has agreed to acquire Malvern-based Siemens Health Services, one of the major purveyors of hospital administrative systems and EHRs, for $1.3 billion. Siemens Health Services grew out of the 2001 acquisition of Shared Medical Systems, but its growth had stalled in recent years as other vendors (particularly Epic) had gained prominence.

Shared Medical was founded in 1969. Siemens acquired it for $2.1 billion.

The health IT business is only one part of a much larger Siemens Healthcare segment. Siemens had decided to exit the business so finding a buyer who would be a good custodian for it became a top priority, Siemens said. Siemens Health Services estimates its 2014 revenue at $1.2 billion. Cerner, which is based in Kansas City, expects combined 2014 revenue of $4.5 billion.

Although Siemens apparently will dispose of some other pieces of its Healthcare unit as a result of a corporate strategic review, it plans an ongoing joint venture with Cerner that will combine capabilities of Cerner's IT business with Siemen's diagnostic businesses.

Cerner indicated that in the short term it expected to operate the two businesses on a stand-alone basis and no major personnel changes are imminent. The combined company will have 20,000 employees, of whom about 5,000 appear to be coming over from Siemens.
The trade source HIStalk provides excellent coverage.