) has entered an agreement to purchase control of tech firm Acme
). The Redwood City, California company will make the purchase
for $29.95 per share for a total of approximately $1.7 billion,
net of Acme Packet's cash.
According to Oracle, "The combination of Oracle and Acme
Packet is expected to accelerate the migration to all-IP networks
by enabling secure and reliable communications from any device,
across any network."
In this regard, Bhaskar Gorti, Senior Vice President and
General Manager, Oracle Communications, states "This combination
will enable secure and reliable delivery of real-time interactive
communications through the most comprehensive, best-in-class
communications portfolio in the industry."
The transaction has been unanimously approved by Acme Packets'
board of directors. It is expected to close during the first half
Acme Packets Tops Earnings Estimates
Acme Packets reported its fourth quarter results on
Revenues were down nearly 15 percent year-over-year, finishing
the quarter at $70.7 million as compared to $83 million in 2011.
EPS results also came in weak on a year-over-year basis at $0.09
per share versus $0.26 in the same period of 2011.
Yet, analysts expected revenues of under $69 billion and an
EPS of $0.08. Thus, although results were down from last year,
the company narrowly edged expectations.
Weak Year Leads to Buyout?
The move comes at an interesting time for Acme Packets.
2012 was a rather weak year for the Bedford, Massachusetts
firm. The company finished with substantially lower figures in
both revenue and EPS in each of the first three quarters as
compared to 2011. As mentioned, fourth quarter earnings came in
above expectations, but were still lackluster in comparison to
the same period in 2011.
With struggling financials, it is possible the firm decided it
was better to be swallowed up by Oracle than ride a sinking ship
into the abyss.
Oracle has traded in the mid-$30s though January and into
February. Despite the news, it continues to trade in this
Oracle is down around one percent on Monday.
Acme Packets, however, has experienced a surge on word of the
buyout. After trading in the high-teens to low-$20s since early
November, the stock has risen above $29.50 as of this
The company is up over 23 percent on Monday. It is at its
highest point since eclipsing $30 in intraday trading on May 3,
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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