Cerner Corp. is preparing to sell part of its software portfolio in Germany and Spain.
The company on Wednesday announced it had entered into an agreement to sell a set of software products used in Germany and Spain to CompuGroup Medical, a German health information technology company, for about $247.5 million. The products generated an estimated $81.4 million in revenue for Cerner during 2019.
The acquisition is expected to close in the third quarter of 2020.
Cerner officials said the sale is reflective of the company's sharpened focus on portfolio management.
"While we refine our strategic focus and align around Cerner's core global assets, we believe clients transitioning to CompuGroup Medical will be in very good hands," said Emil Peters, president of Cerner Global, in a news release.
Two of the products CompuGroup Medical will acquire are Medico, used by 251 hospitals in Germany, and Selene, used by 65 hospitals in Spain.
That echoes sentiments Cerner CFO Marc Naughton shared on a call with investment analysts Tuesday.
Naughton said Cerner is planning to pursue more acquisitions and divestitures in 2020 as it looks to "create more focus in areas most aligned with our refined growth strategy."
The focus is part of an operational improvement effort that Cerner launched in 2019 after striking a deal with Starboard Value, an activist investment fund, with a goal to increase the company's adjusted operating margin to 22.5% by the end of 2020.
The effort includes 165 cost cutting, portfolio management and business simplification initiatives, and in 2019 involved multiple rounds of layoffs at the electronic health records giant.
Cerner's adjusted operating margin for the 2019 fourth quarter was 20.3%, surpassing its target of 20%.
Cerner is one of the biggest brands in the EHR space, accounting for 26% of the EHR market among acute-care hospitals in the U.S., according to a report KLAS Research released last year. Cerner's top rival, Epic Systems Corp., has 28% of the market.