Epic Inks $46 Million-Deal To Acquire Mayo Clinic Data Center
By Christine Kern, contributing writer
Mayo sale-leaseback deal means they will lease it back for at least four years.
In a $46 million sale-leaseback deal, Epic Systems has arranged to buy the Mayo Clinic’s 62,000 square foot data center. Under the terms of the agreement, Mayo transfers ownership of the center to Epic but will continue to lease the asset for at least four years with the option to continue the deal forever according to the Minneapolis/St. Paul Business Journal.
The deal benefits both Epic and the Mayo Clinic, Epic spokesperson Dana Apfel explained, saying, “Epic needed a high quality disaster recovery data center that was some distance away from its production data center yet still close enough to get to easily. Mayo had a high quality data center in an excellent location that was too large for their needs. The terms for the purchase and the terms for Mayo’s portion that they will lease from Epic are at industry standard prices.”
Mayo’s CIO Cris Ross underscored the anticipated longevity of the deal, saying “It’s our intention to be a partner with Epic for decades and to lease back space indefinitely,” according to The Wisconsin State Journal.
In January 2015, Mayo announced it would be adopting Epic’s EHR and revenue cycle platforms which included the construction of a $6.1 billion electronic substation to support the enhanced needs of the data center. Epic is working with Rochester Public Utilities on the project, and the vendor will bear the brunt of the project expense.
The decision also meant Mayo transitioned away from two of Epic’s main competitors, Cerner and GE. Mayo’s EHR system will be managed by Epic as part of the transition, which is “going very well,” according to Ross.
Ross explained the data center, built in 2012, currently has only 12,000 of its 62,000 square feet available for data storage units at the moment, but the building was also designed for significant expansion. “As we projected our needs, it became clear that we wouldn’t fill it out soon enough,” he told the Wisconsin State Journal.
Under the deal, Epic can store records from other healthcare organizations at the data center. Ross explained the data center business “is a new service line for Epic, but it is very common with other vendors and it’s extremely common outside healthcare.”
Epic reportedly manages the health records of more than half of U.S. patients and 2.5 percent of patients worldwide.