Oracle Agrees To Acquire Cerner At Premium
Oracle Corp (NYSE: ORCL) agreed to acquire Cerner Corp (NASDAQ: CERN) for an all-cash tender offer for $95 per share, or $28.3 billion in equity value.
The purchase price implies a 5.8% premium to Cerner's Friday closing price of $89.77.
Related Content: Cerner Shares Soar As Oracle Eyes Healthcare Foray By Takeover: Bloomberg
"We expect this acquisition to be immediately accretive to Oracle's earnings on a non-GAAP basis in the first full fiscal year after closing—and contribute substantially more to earnings in the second fiscal year and thereafter," said Safra Catz, Chief Executive Officer, Oracle.
"Healthcare is the largest and most important vertical market in the world—$3.8 trillion last year in the United States alone. Oracle's revenue growth rate has already been increasing this year—Cerner will be a huge additional revenue growth engine for years to come as we expand its business into many more countries throughout the world. That's exactly the growth strategy we adopted when we bought NetSuite—except the Cerner revenue opportunity is even larger."
Cerner is a leading provider of digital information systems used within hospitals and health systems.
Analyst Ratings: Morgan Stanley analyst Ricky Goldwasser upgraded Cerner from Underweight to Equal-Weight and raised the price target from $77 to $85.
Piper Sandler analyst Jeff Garro raised the price target on Cerner to $95 from $89 and reiterated an Overweight.
Sandler sees Cerner's "shareholder-friendly board" to support the Oracle takeover deal.
Sandler maintained an Overweight based on the modest gap between the trading price and deal price.
Garro believes the merger is likely to be consummated.
Price Action: ORCL shares traded lower by 4.43% at $92.35 on the last check Monday.
Latest Ratings for ORCL
Dec 2021 | Keybanc | Downgrades | Overweight | Sector Weight |
Dec 2021 | Societe Generale | Maintains | Hold | |
Dec 2021 | Barclays | Maintains | Equal-Weight |
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