Oracle to buy NetSuite for $9.3B

Oracle said today that it will spend more than $9 billion to buy “the very first cloud company.” NetSuite, led by a former Oracle marketing executive, says it has been working on cloud technologies for 18 years.
NetSuite reported $741 million in revenue last year. The publicly traded company reported in its most recent proxy statement that Oracle founder Larry Ellison and/or members of his family own roughly 40% of the company’s shares. The two companies said the acquisition is subject to a condition that a majority of NetSuite’s outstanding shares not owned by persons affiliated with Larry Ellison, his family members and any affiliated entities, or by executive officers or directors of NetSuite, be tendered in the offer. Oracle is offering $109 per share in cash. The company’s stock closed Wednesday at $91.57 per share.
Oracle said the NetSuite acquisition will be accretive to earnings during the first full fiscal year after closing. Both companies provide cloud software and solutions, but said their offerings are complementary rather than competitive.
“Oracle and NetSuite cloud applications are complementary, and will coexist in the marketplace forever,” said Oracle CEO Mark Hurd. “We intend to invest heavily in both products – engineering and distribution.”
“NetSuite will benefit from Oracle’s global scale and reach to accelerate the availability of our cloud solutions in more industries and more countries,” said NetSuite CEO Zach Nelson. “We are excited to join Oracle and accelerate our pace of innovation.” Nelson was Oracle’s VP of worldwide marketing from 1996 until 1998.
Oracle’s cloud business faces stiff competition from Amazon, IBM, Google and Microsoft. Amazon Web Services is the market leader, with an estimated 31% of the cloud services market.