Cerner completes Siemens purchase

US health IT giant Cerner has completed its £870 million ($1.3 billion) acquisition of Siemens Health Services.

Cerner’s acquisition of the Siemens business unit, first announced in August 2014, represents a significant consolidation of the US electronic medical records market.

The expanded Cerner will have an expanded client base and R&D resource, and be better able to continue to challenge arch rival Epic. 

In January Cerner lost out to Epic in a high profile EMR procurement by the prestigious Mayo Clinic. 

Both Cerner and Epic remain in the running for the £7.34 billion ($11 billion) US military electronic health records programme, expected to be the largest single EMR procurement for years to come.

The addition of Siemens' health information business also means that Cerner now has a combined annual research and development spend of £433 million ($650 million).

“By combining client bases, investments in R&D and associates, we are in a great position to lead clients through one of the most dynamic eras in health care,” said Neal Patterson, Cerner chairman, CEO and co-founder.

“Cerner remains focused on key development areas including population health, physician experience, open platforms, revenue cycle and mobility,” Patterson added.

John Glaser, the former CEO of Siemens Health Services, has joined Cerner as a senior vice president and member of the company’s executive cabinet.

Cerner and Siemens AG, the former parent company of Siemens Health Services, are also moving forward with a strategic alliance designed to advance industry innovation.

The early focus of the alliance is on integrating diagnostics and therapeutics into the electronic health record.  Each organisation has committed $50 million to the initiative over three years.

“A unique feature of this acquisition is we’ll continue working with Siemens AG in a R&D capacity, in order to advance the interoperability of electronic health records with medical devices,” said Patterson.

Cerner expects revenue in 2015 to be approximately $4.8 billion to $5 billion, with a client base spanning more than 30 countries across more than 18,000 facilities.

Following the acquisition Cerner will have 21,000 associates internationally.

Support for Siemens Health Services core platforms will remain in place. Cerner says current implementations will continue, and that it will support and develop the Soarian platform for at least the next decade.

Siemen's medical imaging business, on which the company has focused in the UK, is not affected by the deal, and neither is its laboratory and diagnostics business.