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 Oracle, led by billionaire Larry Ellison, has been focusing on cloud
software to fend off competition from nimbler rivals such as
Salesforce.com and Workday Inc, which offer Web-based products at
prices that often undercut Oracle.
Four-decade-old Oracle, which came late to cloud computing, has
created sales teams targeting specific cloud competitors and is
trying to be a one-stop shop for operating systems, databases and
software programs over the Web.
Responsys makes cloud-based software that businesses use to manage
their marketing campaigns across e-mail, mobile and the Internet.
Its customers include LinkedIn, Southwest Airlines, and United
Healthcare.
"(The Responsys acquisition) further expands the company's cloud
initiative, which remains a key ingredient to Oracle's recipe for
success over the coming years," FBR Capital Markets analysts Daniel
Ives said in a note to clients.
The deal comes exactly a year after Oracle said it would buy Eloqua,
a maker of cloud-based marketing automation software, for $810
billion. Earlier this year, Salesforce.com acquired ExactTarget,
another marketing software maker, for $2.5 billion.
Cloud computing, a broad term referring to the delivery of services
via the Internet from remote data centers, is a favorite with
corporate technology buyers because it is faster to implement and
has lower upfront costs than traditional software.
The Responsys deal could also trigger consolidation in the software
industry in 2014 as larger firms explore new areas of growth, while
smaller vendors continue look at strategic acquisitions.
"In our opinion, this acquisition makes it more likely that NetSuite
Inc or SAP AG would acquire Marketo," Ives said, noting that neither
have made big acquisitions in digital marketing.
Marketo, which has a market capitalization of $1.25 billion, also
makes marketing software for businesses.
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DEAL TERMS
Oracle's offer of $27 per share represents a premium of about 38
percent to Responsys' Thursday closing. Responsys shares were
trading at $26.94 on the Nasdaq on Friday.
Oracle priced the deal at about $1.5 billion, net of Responsys'
cash.
The deal, which has been approved by the board of directors of
Responsys, is expected to close in the first half of 2014.
Oracle shares were down marginally at $36.65 in midday trading on
the New York Stock Exchange. Marketo shares jumped nearly 10
percent.
The Responsys deal, Oracle's seventh acquisition in the year, is
also its biggest since it acquired network gear maker Acme Packet
for $1.7 billion in February.
(Additional reporting by Sampad Patnaik
in Bangalore; editing by Saumyadeb Chakrabarty)
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