It looks like Oracle’s announced acquisition of NetSuite may finally be going forward.
Announced in July, but mired in shareholder conflict within NetSuite, the acquisition plan was in a bit of a holding pattern. With NetSuite’s largest shareholder being Oracle co-founder and executive chairman Larry Ellison, the acquisition agreement required a majority of the unaffiliated 40.8 million shares of stock to vote in favor of the deal, at a price of $109 a share.
NetSuite’s second largest shareholder, T. Rowe Price, holds 12.2 million shares, and suggested the offer be raised to $133. Oracle refused to move their offer, so there was something of an impasse. It now appears that the acquisition will go forward at the original offer price.
Now with the shareholder drama out of the way, what does Oracle get for it’s $9.3 billion?
Unlike its 2004 purchase of PeopleSoft, this acquisition seems to help Oracle reorient itself to cloud computing (and hopefully won’t result in massive layoffs for NetSuite). Despite cloud revenue growing by 49% last year, it couldn’t outpace decline in other areas for the company, resulting in a 3% overall decrease.
NetSuite brings it’s considerable Software as a Service business, led by its enterprise resource planning software used for inventory and accounting management, all tied into its larger NetSuite OneWorld bundle with CRM and E-commerce tools. The hope would be that Oracle will now be more nimble in competing with smaller SaaS companies, as well as established rivals Salesforce and SAP.
NetSuite saw total revenue of $741.1 million in 2015 and forecast revenue of $955 million for this year.
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