Oracle (NYSE: ORCL) says it has entered into a definitive agreement to acquire NetSuite (NYSE: N), which is the very first cloud company. The deal is valued at $109.00 per share in cash, or approximately $9.3 billion.
Analysts say this will support Nigerian businesses by raising competition in cloud-based services. This competition, analysts say, could have a positive impact on affordability and service delivery in cloud computing.
One analyst said weekend that it could ensure that the majority of SMEs in Africa’s biggest economy migrate to cloud, which will enable them to gain market access and cut costs.
“Oracle and NetSuite cloud applications are complementary, and will coexist in the marketplace forever,” said Mark Hurd, chief executive officer, Oracle. “We intend to invest heavily in both products – engineering and distribution.”
“We expect this acquisition to be immediately accretive to Oracle’s earnings on a non-GAAP basis in the first full fiscal year after closing,” said Safra Catz, co-CEO, Oracle.
“NetSuite has been working for 18 years to develop a single system for running a business in the cloud,” said Evan Goldberg, Founder, Chief Technology Officer and Chairman, NetSuite. “This combination is a winner for NetSuite’s customers, employees and partners.”
According to Zach Nelson, CEO of NetSuite, said: “NetSuite will benefit from Oracle’s global scale and reach to accelerate the availability of our cloud solutions in more industries and more countries.” “We are excited to join Oracle and accelerate our pace of innovation,” Nelson said.
A Special Committee of Oracle’s board of directors consisting solely of independent directors led the evaluation and negotiation of the transaction. The Special Committee unanimously approved the transaction on behalf of Oracle and its Board of Directors.
The transaction is expected to close in 2016. The closing of the transaction is subject to receiving certain regulatory approvals and satisfying other closing conditions including NetSuite stockholders tendering a majority of NetSuite’s outstanding shares in the tender offer. In addition, the closing is subject to a condition that a majority of NetSuite’s outstanding shares not owned by executive officers or directors of NetSuite, or persons affiliated with Larry Ellison, his family members and any affiliated entities, be tendered in the tender offer.
ODINAKA ANUDU
