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Leading healthcare information technology (HCIT) solutions provider Cerner Corporation (CERN - Analyst Report) recently reported an agreement to take over Anasazi Software, a vendor of behavioral healthcare technology.

Anasazi was a leading vendor of healthcare technology to the behavioral health segment. It provided a set of offerings intended to furnish an all encompassing and fine tuned approach to behavioral healthcare while cutting expenses and improving outcomes. The company’s set of offerings included elements such as practice management and an electronic health record.   

This acquisition will lead to the most composite product available in the market. Cerner Anasazi will allow healthcare providers access to information they may use in a productive manner while facilitating transitions in health care. The takeover, which is expected to close in November 2012, is not forecast to have a material effect on Cerner’s 2012 earnings results.

Cerner remains the trend setter among pure-play, publicly traded healthcare IT (HCIT) vendors. We believe Cerner has positioned itself as one of the better placed clinical technology vendors to benefit from high HCIT spending over the next few years. The company is diversified not only on a global basis but serves both hospitals and ambulatory outfits. Its integrated solutions have captured market share. While greenfield opportunities are shrinking, the replacement market is growing.

We believe long-term investors may consider Cerner, which serves a sizeable installed hospital base. It requires composite clinically-focused applications complying with ‘meaningful use’ requirements and tackling complex coding challenges. The company has long-standing, integrated and seamless solutions for both inpatient and ambulatory settings.

On the negative side, the federal Stimulus program will gradually wind down. Cerner faces stiff competition from established HCIT players, such as Athenahealth (ATHN - Analyst Report), Allscripts Healthcare Solutions (MDRX - Analyst Report) and Quality Systems (QSII - Analyst Report) and many others in a crowded field. The company is developing multiple growth drivers which will ensure its future growth.

We have a long-term ‘Neutral’ recommendation on Cerner. The stock currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.

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