Oracle Buys Acme Packet for About $2 Billion

Andrew Klips |

Oracle Corp, ORCL,Oracle Corp. (ORCL) said Monday morning that it will spend about $2 billion to acquire Acme Packet Inc. (APKT), a provider of voice, video and data services over Internet Protocol networks.  The deal values Acme Packet at $29.25 per share, or approximately $1.7 billion, net Acme’s cash.  The price tag is a 22 percent premium to APKT’s closing price on Friday.

The merged firm is expected to accelerate the migration to all-IP networks by enabling secure and reliable communications from any device, across any network, according to today’s corporate statement from Oracle.

Public since 2006, Bedford, Massachusetts-based Acme Packet’s products are used in almost 2,000 service provides across 109 countries, including 89 of the top 100 communications companies.

Also released this morning, during the fourth quarter of 2012, Acme reported revenue of $70.7 million, down from $83.0 million in the year prior quarter, and adjusted fourth-quarter earnings of $6.5 million, or 9 cents per share, compared to $18.3 million, or 26 cents per share in Q4 2011.

"The addition of Acme Packet to Oracle's leading communications portfolio will enable service providers and enterprises to deliver innovative solutions that will change the way we interact, conduct commerce, deliver healthcare, secure our homes, and much more," said Mark Hurd, President of Redwood Shores, California-based Oracle.

"Acme Packet brings deep domain expertise and proven, mission-critical solutions to enable all-IP networks," added Andy Ory, Chief Executive Officer, Acme Packet.

Both boards have approved the transaction, which is expected to by closed by the end of the second quarter, subject to customary approvals.

The latest move is another in a series of acquisitions in recent years that Oracle chief executive Larry Ellison has made to increase revenue for the company.  In December, Oracle bought cloud computing outfit Eloqua Inc. for $810 million.  This is the largest purchase by Oracle since in bought Taleo Corp. for $1.9 billion last February.

Shares of APKT have risen at 22 percent to right around the buy-point in early trading on Monday while shares or Oracle are trading down by a little more than 1 percent at $35.70.

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Symbol Name Price Change % Volume
ORCL Oracle Corporation 40.52 0.17 0.42 11,219,098
TOL24 Toll Brothers Finance Corp 5.625% Sr Nts 2024 n/a n/a n/a 0

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