By Dow Jones Business News,
August 05, 2014, 05:15:00 PM EDT
Cerner Corp. said it has agreed to buy Siemens AG's health information technology business unit for $1.3 billion cash.
As part of the agreement, Cerner and Siemens will form a strategic alliance building on Cerner's health IT business
and Siemens's medical devices and imaging.
The deal is expected to close in the first quarter and add more than 15 cents to Cerner's adjusted per-share profit in
2015 and more than 25 cents in 2016.
Cerner, based in Kansas city, Mo., makes medical software for hospitals and other medical facilities. It has benefited
in recent years as health professionals and hospitals shift to electronic records.
On Tuesday, Cerner said the Siemens Health Services' acquisition would create an expanded unit with an estimated $4.5
billion of annual revenue, with about $650 million going into research and development, and about 18,000 client
Cerner said it intended to continue to support Siemens's core platforms, including Siemens's Soarian platform.
Germany'sSiemens AG had announced in May plans to re-engineer its business by, among other things, spinning off its
hearing-aid unit as a public company and managing the rest of its health-care business as a separate unit.
Cerner's shares rose nearly 2% in recent after-hours trading to $55.36.
Siemens's American depositary receipts were basically flat at $119.17 in recent after-hours trading.
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