Confirming earlier rumors,
) recently agreed to buy
) for a whopping sum of $5.3 billion. The transaction is expected
to close in the second half of 2014.
Shares of Micros surged 3.36% ($2.21) following the news. Oracle
shares recorded a slight increase of 0.69% ($0.28), which in turn
reflects that the acquisition has already been priced in.
MD-based MICROS manufactures and sells point-of-sale hardware,
software, and services to restaurant, hotel, hospitality, specialty
retail markets and other similar markets.
MICROS generated revenues of $1.29 billion in fiscal 2013 and is
projected to generate revenues of $1.37 billion in fiscal 2014.
Currently, MICROS assists in the operation of more than 330,000
sites in 180 countries.
Oracle believes that the addition of MICROS to its portfolio will
extend its offerings in the retail and hospitality industries as
well as strengthen its position in all those industry spaces where
there is scope for technological expansion. Moreover, the company
also expects this acquisition to be accretive to its bottom line
with immediate effect.
It will also enable Oracle to face competition from the likes of
) as well as enable it to solidify its position as a
software-as-a-service e-commerce vendor.
This is the biggest deal for Oracle since it acquired Sun
Microsystems for $7.0 billion in 2010. Per reports, Oracle intended
to acquire MICROS six years back but the deal did not materialize
that time due to some unknown reasons.
Of late, Oracle has been on an acquisition spree in order to
diversify its offerings. The company has spent about $50 billion to
acquire 100 companies during the last 10 years. Out of these, 20
odd had been geared toward specific industries.
We believe that Oracle, being a late entrant to the cloud computing
field, will continue to pursue strategic acquisitions to improve
its market share and top-line growth.
Moreover, the speedy adoption of engineered systems and cloud
suites will drive top-line growth, going ahead. Moreover, Oracle's
strategy of providing end-to-end solutions will further attract new
customers in the long run.
Currently, Oracle has a Zacks Rank #3 (Hold).
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