Oracle to Buy Cloud-Software Provider for $9.3 Billion
July 29, 2016
Grazed from Nasdaq. Author: Editorial Staff.
Oracle Corp. agreed to pay $9.3 billion for a cloud-computing pioneer that counts Larry Ellison as a major investor, using its second-largest acquisition to try to catch up in a key area where it has lagged.
Oracle said it is paying $109 a share in cash for NetSuite Inc., a 19% premium to the company’s closing price Wednesday of $91.57. The deal is raising questions about the role of Mr. Ellison, Oracle’s chairman, who is the biggest shareholder in both companies…
Cowen & Co. analyst J. Derrick Wood noted the "high degree of litigation risk for Larry Ellison" in a Wednesday research note contemplating Oracle’s possible acquisition of NetSuite, particularly if Oracle paid a multiple higher than its historic transactions for similar cloud software companies. By Mr. Wood’s analysis, Oracle paid 11 times NetSuite’s previous 12 months’ revenue, whereas it paid about 6.5 times trailing 12-month revenue for its last six similar acquisitions…
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