In one of the largest acquisitions in its history, Oracle has agreed to buy the world’s very first cloud software company, NetSuite, for $9.3bn in cash.
The acquisition values NetSuite at $109 per share.
“Oracle and NetSuite cloud applications are complementary, and will co-exist in the marketplace forever,” said Mark Hurd, chief executive officer of Oracle.
“We intend to invest heavily in both products – engineering and distribution.”
‘NetSuite has been working for 18 years to develop a single system for running a business in the cloud’
– EVAN GOLDBERG, NETSUITE
The original of the cloud species
The very first cloud software company, NetSuite was founded in 1998 by Evan Goldberg as NetLedger. Rather confusingly, it was renamed Oracle Small Business Suite before finally becoming NetSuite.
NetSuite’s ties with Oracle are very close indeed. Oracle founder and chair Larry Ellison invested $125m in the company when it first started, and Ellison and family members owned almost half of NetSuite’s stock prior to the acquisition by Oracle.
This close relationship raises the spectre of potential litigation and NetSuite shareholders are likely to have little option but to accept the deal.
“NetSuite has been working for 18 years to develop a single system for running a business in the cloud,” said Evan Goldberg, founder, CTO and chair of NetSuite.
“This combination is a winner for NetSuite’s customers, employees and partners.”
The transaction, subject to regulatory approval, is expected to close in 2016.
Oracle plane image via Shutterstock
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