Cerner's (CERN) AbleVets Buyout to Boost Federal Services

Cerner Corporation CERN recently announced a definitive agreement to acquire AbleVets, which will help it to revamp its federal and military health IT systems. The transaction is expected to close in the fourth quarter of 2019. Terms of the deal have been kept under the wraps.

Following the announcement, shares of the Zacks Rank #3 (Hold) company climbed 0.6% to $68.16 at close.

For investors’ notice, AbleVets is a Washington DC-based IT consulting and engineering firm, which has been Cerner’s trusted partner in providing critical support to federal programs.

How Will Cerner Benefit?

With AbleVets’ technical expertise, Cerner can provide integrated, seamless care for veterans, federal service members and their families.

The integration of Cerner’s coveted electronic health records (EHR) platform reduces the time and risks associated with IT modernization efforts.

In fact, earlier this year, Cerner received $139.9 million as part of a task order from the Department of Veteran Affairs (VA), seeking support for the EHR interface part of VA’s Cerner EHR platform.

A Brief Note on Cerner’s Federal Programs

Cerner provides intelligent, secure solutions to government agencies for supporting their populations and improving the business of health care.

The company’s collaboration with the VA to create a completely integrated health record platform to provide veterans a lifetime of seamless care also deserves a mention.

Cerner’s other federal clients include the Federal Bureau of Prisons, Indian Health Service, U.S. Centers for Disease Control and U.S. Department of Defense.

Price Performance

Over the past year, shares of Cerner have rallied 7.3% against the industry’s 3.3% decline. The performance compares favorably with the S&P 500 index’s 8.1% rise.

Key Picks

A few better-ranked stocks from the broader medical space are Nissan Chemical Corporation NNCHY, Straumann Holding AG SAUHF and McKesson Corporation MCK, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Nissan Chemical has a long-term earnings growth rate of 10%.

Straumann Holding has a long-term earnings growth rate of 18%.

McKesson has a long-term earnings growth rate of 6.9%.

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