Cerner Corp. has completed its acquisition of Siemens Health Services, the Malvern, Pa.-based health information technology business unit of the German conglomerate Siemens, almost six months after the $1.3 billion deal was announced last August.
“It’s a 50% increase to our global presence,” Cerner President Zane Burke said in an interview. The acquisition adds another $200 million dollars to Cerner’s existing $400 million in overseas revenue, he said.
The marriage of the two health information technology system developers will expand Cerner’s overseas footprint into six additional nations to 30 countries, Burke said.
Publicly traded Cerner’s 2014 annual financial report is expected later this month. In 2013, Cerner posted revenues of $2.9 billion and net income of $398.4 million, or $1.13 per share.
“The six (new) countries are on the list of countries where we wanted to go play,” but had not yet entered, Burke said. “We were pleased on how that worked out.”
“It gives us entry into a country like Germany where we didn’t have a market presence” but where Siemens is strong, he said.
Cerner offered employment to all 5,500 Siemens Health Service workers and “had a 97% accept rate,” he said. That transfer of workers accompanies the closing of the deal.
Combined, Cerner and Siemens have almost 13% of the key market niche for complete, inpatient EHR systems, based on the number of hospitals that have received payments under the federal EHR incentive payment system, according CMS data.
Epic Systems, Verona, Wis.; Medical Information Technology, also known as Meditech, Westwood, Mass.; and Computer Programs and Systems Inc., commonly known as CPSI, Mobile, Ala.; have 17%, 16% and 14% shares of that same niche, respectively, according to CMS data. The customer base for both Cerner and Siemens typically are larger hospitals than typical customers for Meditech or CPSI.
Neither Cerner nor Siemens customers should feel any major, post-acquisition after-shocks, according to Burke.
Cerner plans to “support and enhance Siemens’ flagship Soarian electronic health records system, “for at least the next 10 years,” said Burke, reiterating a pledge officials from both companies made earlier. No announcements are looming for discontinuation of lesser Siemens products, he said.
Cerner will continue to market enhancements to Soarian to its customers as they become available. But Cerner’s go-forward strategy is to sell only its own family of products to the rest of the market, with one possible exception.
Siemens makes a stand-alone hospital financial software package while Cerner’s financial products are integrated into its Millennium offering.
An attractive niche market exists for the stand-alone Siemens software at smaller hospitals looking to upgrade but wanting to retain their clinical systems from other vendors, Burke said. Cerner will continue to sell that Siemens software system to those customers, he said.
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