Oracle to buy cloud computing pioneer NetSuite for $9.3 bn
28 July 2016
Oracle today struck a deal to buy cloud computing pioneer NetSuite Inc in a deal valued at about $9.3 billion, in a bid to expand its presence in the fast-growing cloud business segment.
Oracle is offering to pay $109 in cash, a 19-per cent premium to NetSuite's Wednesday closing price of $91.57.
The deal is expected to close in 2016, subject to regulatory and shareholder approval.
Larry Ellison, chairman of Oracle, is the largest shareholder in NetSuite with a near 40-per cent stake.
''Oracle and NetSuite cloud applications are complementary, and will coexist in the marketplace forever,'' said Mark Hurd, CEO of Oracle. ''We intend to invest heavily in both products - engineering and distribution.''
Oracle is keen to offset the decline its software business has been facing, by moving into web-based business, an area in which its rivals like Microsoft and Amazon Web Services have a profitable cloud computing business.
''NetSuite has been working for 18 years to develop a single system for running a business in the cloud,'' said Evan Goldberg, founder, chief technology officer and chairman, NetSuite. ''This combination is a winner for NetSuite's customers, employees and partners.''
In 1998, NetSuite pioneered the Cloud Computing revolution, establishing the world's first company dedicated to delivering business applications over the Internet.
NetSuite provides a suite of cloud-based financials/Enterprise Resource Planning and omnichannel commerce software that runs the business of more than 30,000 companies in more than 100 countries.
This is one of the largest acquisitions in Oracle's history.
Its other large purchases include Sun Microsystems in 2009 for $7.4 billion, BEA Systems for $8.5 billion in 2008, PeopleSoft for $10.3 billion in 2004, and Micros Systems in 2014 for $5.3 billion.