News Column

Siemens selling Malvern IT division for $1.3B

August 6, 2014

By Harold Brubaker, The Philadelphia Inquirer

Aug. 06--Siemens AG, a diversified German industrial giant, said it has agreed to sell its Malvern-based hospital information-technology division for $1.3 billion in cash to Cerner Corp. of Kansas City, Mo.

The Siemens operations that are being sold employ more than 5,800 people worldwide, provide services at 5,000 client sites in 30 countries, and are expected to have $1.2 billion in revenue this year, Cerner said.

Siemens Health Services, the IT business Cerner is buying, provides computer systems for both clinical and financial operations of hospitals.

As part of the deal, Cerner said it was acquiring Siemens'Malvern campus, where 3,950 work, according to a municipal bond document. That makes the campus Chester County's third-largest employer.

"We're committed to the Malvern office and look forward to working with these associates," said Kate O'Neill Rauber, a Cerner spokeswoman.

The deal, expected to close in the first quarter of 2015, is a bid to help Cerner prepare for a new era in health-care information technology, Neal Patterson, Cerner's cofounder, chairman, and chief executive, said during a conference call.

Patterson said that the recent push by the federal government to subsidize the health-care industry's move to electronic medical records has made information technology "ubiquitous across health care. It's inside health care and will never go away."

The next stage, Patterson said, is a move toward what is called population health management, which means that health-care providers need to keep people on their radar who don't come to the office.

"We're going to create a new layer of information" to help make that possible, Patterson said.

Cerner earned nearly $400 million last year on $2.9 billion in revenue.

Siemens said it had invested significantly in the Malvern business and had made progress technologically. "At the same time, we realized that the business success of our hospital information systems could not always keep pace with our competition," said Hermann Requardt, chief executive of Siemens Healthcare, which includes health-care equipment such as diagnostic imaging devices.

The Siemens Health Services business in Malvern traces its roots to Share Medical Systems, which was founded in 1969. Siemens bought it in 2000 for $2.1 billion.

215-854-4651 @InqBrubaker


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Source: Philadelphia Inquirer (PA)

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