Oracle to Purchase NetSuite
Oracle Corp. (NYSE: ORCL – $40.93) said it has agreed to buy San Mateo, California-based NetSuite, Inc. for $9.3 billion, bolstering the software maker’s cloud-computing offerings as it races to catch up to rivals. Both companies provide applications for running a business called enterprise-resource planning (ERP) software. NetSuite offers a broad range of applications, including accounting, customer relationship management, professional services automation and eCommerce that help companies manage operations in one central software package. Oracle said it plans to invest heavily in both company’s products, and that the deal would immediately add to its earnings on an adjusted basis. Oracle is an aggressive acquirer spending more than $1 billion in recent months to buy Opower Inc., which makes cloud software for the utility industry and Textura Corp., which provides similar services for construction businesses. A 2014 multi-billion dollar deal was Oracle’s $5.3 billion purchase of Micros Systems Inc., which sells internet-connected cash registers for the restaurant and hospitality industry. The NetSuite acquisition, however, would be Oracle’s largest.
While Oracle has improved its homegrown cloud products, it is battling companies such as Salesforce.com Inc. and Workday Inc., which deliver software and storage solely on the web. Oracle also is fighting to keep pace with giants including Microsoft Corp. and Amazon.com, which have built large businesses running customers’ computing operations in the cloud. The deal is expected to close in 2016, subject to regulatory and shareholder approval.