February 4, 2013 4:41 pm

Oracle expands cloud operations

Oracle is buying Acme Packet, a provider of secure communications technology, for $2.1bn in cash as it boosts its offering to businesses in the internet cloud.

The Silicon Valley company said it would pay $29.25 a share for the Nasdaq-listed company – a 22 per cent premium to its closing price on Friday. Taking out Acme Packet’s cash, Oracle said it was paying $1.7bn.

It described its latest acquisition as the leading global provider of session border control technology, which enables secure and reliable connections over Internet Protocol networks.

“The addition of Acme Packet to Oracle’s leading communications portfolio will enable service providers and enterprises to deliver innovative solutions that will change the way we interact, conduct commerce, deliver healthcare, secure our homes, and much more,” said Mark Hurd, Oracle president, in a statement.

Oracle has spent $40bn on 70 acquisitions since 2005, according to Bloomberg data, as the database software and hardware company reshapes itself to deliver more services over the internet.

Analysts at Evercore Partners said in a note: “Oracle’s proposed purchase underlines their commitment to expanding their presence in the mobile carrier market and the potential of the mobile broadband market.”

They said the purchase price seemed reasonable and could be at least $0.01-$0.02 accretive to earnings per share in its 2014 fiscal year.

Acme Packet’s board unanimously approved the transaction, which is expected to close in the first half.

Its shares rose 22.4 per cent to $29.29 in morning trading in New York on Monday. Oracle shares were down 1.6 per cent at $35.61, but have risen 22 per cent over the past year.

Andy Ory, Acme Packet chief executive, said: “Together with Oracle, we expect to provide customers with purpose-built, innovative solutions to accelerate the deployment of all-IP networks and help deliver a consistent experience across all services, devices and networks.”

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