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Cerner (CERN) to Buy Kantar Health to Enhance Clinical Research

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·3 min read
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Cerner Corporation CERN recently inked a deal to acquire Kantar Health – a division of Kantar Group – which will enable Cerner’s Learning Health Network client group to engage with life sciences for funded research studies in a more direct manner. Notably, the company is acquiring Kantar Health for $375 million in cash, which is subject to adjustment.

The buyout is anticipated to be concluded in the first half of 2021 following regulatory approval, employee consultations and other conditions. Further, the transaction is not likely to have a material impact on Cerner’s earnings in 2021.

Cerner continues to focus on its strategy of acquiring complementary businesses that enable the company to expand its solutions, device offerings and services, and grow its market and client base. This deal is likely to strengthen the company’s product portfolio.

Cerner Learning Health Network at a Glance

Cerner Learning Health Network has been developed with an aim to revolutionize clinical research and provides free access to a network of bi-directional, de-identified data resources to health systems. This access aids in advancement of research efforts and offers opportunities to generate revenues with funded research studies from life science companies.

Significance of the Buyout

With this acquisition, Cerner intends to control data to boost safety, efficiency and efficacy of clinical research throughout life sciences, pharmaceuticals and health care. The company’s Learning Health Network has been developed along with its provider clients to treat global diseases via an expedition of clinical research in an effective manner.

The deal between Cerner and Kantar Health is anticipated to facilitate a two-sided partnership between provides and the pharmaceutical industry. This collaboration will help researchers to generate insights and utilize differentiated real-world data assets and experience to address the most complicated questions related to clinical research.

Another Notable Acquisition

Cerner has commenced integration of AbleVets’ (completed the buyout of AbleVets for around $75 million in cash consideration in fourth-quarter 2019) into its portfolio to accelerate growth in the federal space. Per management, the acquisition is expected to contribute about $90 million to revenues in 2020. On the basis of expertise and the importance of Cerner’s federal business, AbleVets seems like a suitable fit.

Price Performance

Shares of this Zacks Rank #3 (Hold) stock have gained 4.5% in a year’s time compared with the industry’s rally of 30.2%.

Stocks to Consider

Some better-ranked stocks from the broader medical space are Merit Medical Systems, Inc. MMSI, Align Technology, Inc. ALGN and Thermo Fisher Scientific Inc. TMO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Merit Medical has a projected long-term earnings growth rate of 12.6%.

Align Technology has an estimated long-term earnings growth rate of 18.3%.

Thermo Fisher has a projected long-term earnings growth rate of 18%.

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Cerner Corporation (CERN) : Free Stock Analysis Report
Merit Medical Systems, Inc. (MMSI) : Free Stock Analysis Report
Align Technology, Inc. (ALGN) : Free Stock Analysis Report
Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report
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