Oracle Buying Responsys for $1.5 Billion, Shares Up 10 Percent This Week

Andrew Klips |

A day after beating analysts with its quarterly report that sent its stock to a fresh 13-year high, database software maker Oracle Corp. (ORCL) said it is willing to pay $27 per share to buy Responsys Inc. (MKTG) in a deal worth $1.5 billion.  The acquisition price represents a 38-percent premium to the closing price of Responsys yesterday.

The acquisition broadens Oracles reach in online marketing, creating what it calls the “world’s largest modern marketing cloud.”  Responsys makes cloud-based business-to-consumer marketing software that helps customers run mobile, email, display and social advertising campaigns.

"Responsys has always been focused on helping marketers realize their largest opportunity -- coordinating their marketing touch points across channels, across the customer lifecycle, and across industries, and as a part of Oracle, we will only accelerate our efforts," said Dan Springer, chief executive of Responsys, in a statement today.

The Responsys board has approved the transaction, which is expected to close in the first half of 2014.

The purchase is at least the seventh in 2013 for acquisition-hungry Oracle.  To name just a few of the deals, in October the company bought cloud-based Configure, Price and Quote solution provider BigMachines for what was reported as in excess of $400 million (actual details weren’t disclosed).  Last month it bought mobile security startup Blitzer Mobile for an undisclosed amount.  In February, Oracle spent $2.1 billion in cash to buy Acme Packet, the second largest maker of business applications.

Looking to stay ahead of competition and transition to cloud software from its legacy products, Oracle has spent roughly $55 billion on about 85 acquisitions since 2005 under the command of CEO Larry Ellison.

After whiffing on earnings in the prior two quarters, Oracle delivered in the on its fiscal second-quarter earnings earlier this week.  For the quarter, Oracle generated $9.3 billion in revenue, up 2 percent from the year prior quarter.  Adjusted earnings per share were 69 cents, up 7 percent from last year’s quarter.  Both figures topped Wall Street expectations of 67 cents per share in profits on $9.2 billion in sales.

Bookings for cloud enterprise products rose by 35 percent year-over-year, indicating that the move to more cloud offerings are starting to pay off and that the company may be better aligned than competitors heading into 2014.

Oracle sees revenue rising between 3 and 7 percent for the current quarter and adjusted earnings in the range of 62 cents to 68 cents.

Shares of ORCL are trading essentially flat in early Friday action after jumping more than 10 percent this week.  Shares of MKTG were initially halted with the acquisition news, but have popped ahead to trade and hold in the area of $27 per share.

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Companies

Symbol Name Price Change % Volume
ORCL Oracle Corporation 38.50 -0.20 -0.52 19,120,264
HTHIY Hitachi Ltd. ADR 54.05 0.07 0.13 7,709

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