Oracle in Talks to Purchase Cerner

Kansas Metropolis, Mo.-based Cerner designs software program that hospitals and medical doctors use to retailer and analyze medical information and different healthcare knowledge. It has a market worth of round $23 billion. With a typical takeover premium, a deal could be anticipated to worth the corporate at one thing like $30 billion, although precise phrases being mentioned couldn’t be discovered.

Oracle, a Silicon Valley veteran that final 12 months moved its headquarters to Austin, Texas, is among the largest software program suppliers to different corporations and organizations.

In August, Cerner tapped

David Feinberg

as chief government officer, a task he assumed in October. Mr. Feinberg got here from Oracle rival Google, the place he had led the

Alphabet Inc.

unit’s push into healthcare and helped strike partnerships with a number of the nation’s largest hospital techniques to gather and analyze their knowledge.

Oracle already has a big presence in healthcare, providing expertise meant to assist well being insurers, healthcare suppliers and public well being techniques parse knowledge to extend effectivity and enhance affected person outcomes.

Oracle shares closed Thursday at $103.22, down barely amid a broad-based tech selloff and simply off an all-time excessive reached the day earlier than. They jumped over 15% final week when the corporate reported fiscal-second-quarter outcomes that topped estimates and Chief Govt

Safra Catz

reiterated the expectation that full-year income development would speed up from the 12 months earlier. Ms. Catz, who grew to become the only CEO in 2019, mentioned she expects the corporate’s working margins to be the identical or higher than they have been pre-pandemic.

The corporate additionally elevated the authorization for share repurchases by $10 billion.

Shopping for Cerner may assist Oracle with its pivot towards the cloud. Buyers have warmed to Oracle as the corporate ramps up its deal with profitable cloud-computing enterprise, after initially being gradual to embrace the booming marketplace for storing and analyzing knowledge on distant servers. Oracle has been making an attempt to make up floor in recent times after falling behind corporations corresponding to

Amazon.com Inc.

and

Microsoft Corp.

, which each now have market values properly exceeding $1 trillion thanks partly to thriving cloud items.

A deal for Cerner would comply with Microsoft’s settlement in April to purchase artificial-intelligence firm

Nuance Communications Inc.

for $16 billion, in a wager on the rising demand for digital healthcare instruments.

Oracle was based by outspoken billionaire

Larry Ellison

and others in 1977. Mr. Ellison owns roughly 42% of the corporate’s shares, a stake that’s price properly over $100 billion. Mr. Ellison handed the CEO reins to Ms. Catz and the late

Mark Hurd

in 2014, however stays chairman and chief expertise officer.

A deal for Cerner would simply high Oracle’s next-largest transaction, the roughly $10 billion buy of enterprise-software agency PeopleSoft Inc. that closed in 2005, adopted by a $9 billion deal for cloud-software supplier NetSuite Inc. in 2016.

In 2020, Oracle confirmed an urge for food for greater offers when it beat out Microsoft in bidding for the video-sharing app TikTok’s U.S. operations. The Trump administration’s considerations about TikTok’s Chinese language possession had successfully put the enterprise in play, however the deal was placed on maintain indefinitely by the Biden administration.

Cerner, based in 1979, competes with the likes of privately held Epic Methods Corp. and Athenahealth Inc., which just lately agreed to a sale to 1 group of private-equity companies by one other for round $17 billion together with debt.

Cerner shares rose barely to $79.49 Thursday.

An Oracle-Cerner deal would rank as one of many largest takeovers of 2021, which is shaping as much as be one of many busiest ever for mergers and acquisitions. Merger exercise within the U.S. is up 78% to $2.45 trillion, in accordance with Dealogic, as lofty inventory costs and simple cash embolden corporations to strike offers and special-purpose acquisition corporations are shaped at a breakneck tempo.

Write to Cara Lombardo at cara.lombardo@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com