Oracle looks to boost growth with biggest deal in 5 years

Mon Jun 23, 2014 11:48pm IST

The company logo is shown at the headquarters of Oracle Corporation in Redwood City, California in this February 2, 2010 file photograph. REUTERS/Robert Galbraith/Files

The company logo is shown at the headquarters of Oracle Corporation in Redwood City, California in this February 2, 2010 file photograph.

Credit: Reuters/Robert Galbraith/Files

Related Topics



REUTERS - Oracle Corp said it would buy Micros Systems in a $5.3 billion deal as the world's No.2 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 multi-billion dollar acquisition by Larry Ellison-led 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 Inc and Workday Inc for their software and internet-based products.

"I think this is really Larry Ellison looking in the mirror realizing the need to get aggressive yet again on M&A," FBR Capital Markets analyst Daniel Ives told Reuters.

"It is clear to us that the company needs to quickly put more 'growth fuel in its engine' to catalyze growth in the top-line," Ives said.

The Micros deal fits with Oracle's plan to expand its fast-growing cloud business, where it has been a late entrant.

Micros sells internet-connected cash registers and provides a host of cloud-based services such as e-commerce and customer relationship management to hotels and restaurant chains, including Louvre Hotels, TGI Friday's and Yum Brands Inc.

Micros' full-year revenue rose 15 percent to $1.27 billion in the year ended June 2013.


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.

"I believe it's just the beginning of a massive M&A cycle for Oracle where we could see them spending $15-$20 billion in acquisitions over the next one to two years," Ives said.

He reckons the deals will be focused on cloud, big data as well as cyber security.

The company had $38.8 billion of cash and short-term investments as of May 31, positioning it for more deals.

Oracle said on Monday it offered Micros shareholders $68 per share, representing a premium of 3.4 percent to the stock's Friday close.

Micros shares were trading at $67.97 on Monday afternoon. Up to Friday's close, they had risen 14 percent since Bloomberg reported on June 17 that the companies were in talks.

Ives said the Micros deal could help Oracle stave off threat from e-commerce software providers such as Demandware Inc and NetSuite Inc.

Oracle said the transaction is expected to add to earnings immediately.

Wedbush analyst Steve Koeing estimated the deal would add about 3-4 percent to Oracle's revenue and add 3 cents to 4 cents per share to its earnings on a twelve-month basis.

Oracle's shares were up 0.7 percent at $41.09.

(Reporting by Abhirup Roy and Lehar Maan in Bangalore; Additional reporting by Supriya Kurane; Editing by Sunil Nair and Saumyadeb Chakrabarty)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared


Adani Project

Adani Project

Australia approves Adani's $16 bln Carmichael coal project  Full Article 

India-U.S. Talks

India-U.S. Talks

Kerry to woo Modi's India, but quick progress unlikely  Full Article 

Paring Debt

Paring Debt

Jaiprakash to sell hydro plants to Reliance Power  Full Article 

Nifty Falls

Nifty Falls

The broader index hits lowest in nearly a week on profit taking  Full Article 

Mideast Conflict

Mideast Conflict

U.N. Security Council calls for humanitarian ceasefire in Gaza  Full Article 

Market Eye

Market Eye

Foreign investors prefer Indian cyclicals, utilities - Macquarie  Full Article 

Debt Investment

Debt Investment

India's FII debt limit hike credit-positive, says Moody's  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage