Oracle gave its cloud-services strategy a big boost by offering to buy NetSuite in a deal valued at about $9.3 billion.
Oracle, which sells software to big corporations, has been trying to shift more sales to cloud-based products increasingly demanded by its customers. New cloud services made up about 8% of the company's total sales during its fiscal fourth-quarter. Buying NetSuite -- whose products include customer relationship management software -- will help Oracle compete against the likes of Salesforce and Microsoft.
"Oracle and NetSuite cloud applications are complementary, and will coexist in the marketplace forever," said Oracle's co-chief executive officer Mark Hurd in a statement Thursday. "We intend to invest heavily in both products -- engineering and distribution."
The deal, which offers $109 per share in cash for NetSuite, will be "immediately accretive to Oracle's earnings" on an adjusted basis, in the full fiscal year after closing, Oracle co-chief executive officer Safra Catz said.
Founded in 1998, NetSuite, with a market capitalization of $7.37 billion, sells cloud business software including customer relationship management and e-commerce tools. In May, the company unveiled software that unifies various accounting functions -- for example, billing, revenue recognition, orders and subscriptions -- into one system. NetSuite has more than 30,000 customers, the bulk of which are small and mid-size companies.
As of March, Oracle co-founder Larry Ellison and his family owned about 45.4% of NetSuite's common stock, according to a company filing. Ellison has "control over approval of significant corporate transactions,'' according to the filing.
-- Bloomberg News