Oracle said it would buy Micros Systems in a $5.3 billion (€3.9 billion) deal as the world's second largest business software maker looks to boost flagging growth through acquisitions.
The purchase of Micros, which makes point-of-sale hardware and software for restaurants and hotels, is the first multibillion dollar acquisition by Oracle in five years and follows disappointing fourth- quarter results.
Analysts said the acquisition could be first in a string of deals for Oracle, which has been stung by aggressive pricing by companies such as Salesforce. com and Workday for their software and internet-based products.
“We view this morning’s Micros deal as just the start of what we expect will be a surge of M&A activity for Oracle over the coming year,” FBR Capital Markets analyst Daniel Ives wrote in a note to clients. “It is clear to us that the company needs to quickly put more ‘growth fuel in its engine’ to catalyse growth in the top line.”
Larry Ellison-led Oracle's spree of acquisitions has slowed of late. Micros is the company's largest acquisition since its $5.6 billion purchase of Sun Microsystems in 2009.
Oracle said yesterday it offered Micros shareholders $68 per share, representing a premium of 3.4 per cent to the stock’s Friday close. Micros shares were trading at $67.87 a few minutes after the opening on Monday. Up to Friday’s close, they had risen 14 per cent since reports on June 17th that the companies were in talks.
Net of Micros’s cash, the value is $4.6 billion, Oracle said in a statement yesterday.
Oracle last week reported flat new software sales and internet-based software subscriptions in its fiscal fourth quarter, disappointing investors looking for progress against rivals selling web-based services.
Oracle’s sales have declined or gained less than 5 per cent in each of the past 11 quarters as customers gravitate to rivals selling internet-based software. – (Reuters/Bloomberg)
