SAN FRANCISCO – Oracle Corp., the second-largest maker of business applications, has agreed to acquire Acme Packet Inc. for $2.1 billion, gaining networking gear that helps corporations securely transmit information over the Internet.
Oracle will pay $29.25 a share in cash, according to a statement Monday. That marks a 22 percent premium over Acme’s stock price on Feb. 1, the last trading day before the deal was announced. Excluding Acme’s cash, Oracle is paying $1.7 billion.
Oracle Chief Executive Officer Larry Ellison has spent more than $50 billion on more than 80 acquisitions since 2005 to expand in the market for software and tools that deliver computing over the Internet, moving beyond the company’s traditional applications that run on corporate servers. Acme’s tools to transmit voice and video via the Web may help Oracle challenge Cisco Systems Inc. in networking – a market that’s benefiting from the boom in mobile devices.
Either the total addressable market is on the verge of a huge, transformational inflection point and will quickly balloon into a multibillion dollar market, or Oracle senses that the future of its business model is in the control of communications data flow, and this acquisition, pricey as it is, is a sure beachhead into a new leg of growth, Greg Mesniaeff, an analyst at Maxim Group, wrote in a research note.
Net of cash, Oracle’s offer for Acme is more than six times the target company’s sales over the last 12 months, according to data compiled by Bloomberg.
Acme’s gear may help revive slumping sales of hardware Oracle gained through the $7.4 billion 2010 purchase of Sun Microsystems, Ross MacMillan, an analyst at Jefferies & Co., wrote.