Leading healthcare information technology (:HCIT) solutions provider, Cerner Corporation (CERN) recently revealed the acquisition of Labotix Automation Inc. Labotix is a leader in providing flexible and open automation solutions to the clinical laboratory setting. This acquisition is likely to provide expertise for supporting the high volume testing market.
According to Cerner, the acquisition of Labotix has placed the company in a strategic position from where it can focus on helping clients through automation options, as well as reducing errors while upgrading capacity of laboratory processing.
Labotix Automation, started in 1991, is an open automation solution, which functions with all devices prevailing in the market. The company’s worldwide installations have been operating and adapting to changes for more than two decades. Through its worldwide operations, Labotix gained proficiency, knowledge and trust to meet the needs of a laboratory, irrespective of its size.
Now that the acquisition is complete, Cerner aims to offer Labotix’s expertise to its global client-base by enhancing operations in laboratories through assimilation of Cerner’s platforms. According to Labotix the commitment of Cerner combined with its expertise is likely to bring about accuracy and better results.
Cerner remains the trendsetter among pure-play, publicly traded healthcare IT (:HCIT) vendors. The company is diversified not only on a global basis but serves both hospitals and ambulatory outfits. Its integrated solutions have captured market share. While greenfield opportunities are shrinking, the replacement market is growing.
We believe long-term investors may consider Cerner, as it serves a sizeable installed hospital base that requires composite clinically-oriented applications complying with “meaningful use” requirements, reimbursement difficulties and complicated coding challenges. The company has long-standing, integrated and seamless solutions for both inpatient and ambulatory settings.
On the negative side, the federal Stimulus program is gradually winding down. Cerner faces stiff competition from established HCIT players, such as Athenahealth (ATHN). Cerner carries a Zacks Rank #3 (Hold) . However, we are more positive about other stocks such as Cyberonics Inc. (CYBX) and Given Imaging Ltd. (GIVN) both of which carry a Zacks Rank #1 (Strong Buy) and are expected to do well.
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