Oracle to buy NetSuite cloud company in $9.3bn deal
29 July 2016 | Alan Burkitt-Gray
Larry Ellison’s Oracle is to buy cloud company NetSuite, in which Ellison is the largest shareholder, for $9.3 billion.
The deal is subject to the condition that it is approved by a majority of those shareholders who are not related to Ellison. But Oracle and NetSuite expressed confidence that the deal will go through before the end of 2016.
Oracle’s two CEOs, Mark Hurd and Safra Catz, both welcomed the deal. “Oracle and NetSuite cloud applications are complementary, and will coexist in the marketplace forever. We intend to invest heavily in both products—engineering and distribution,” said Hurd.
Catz added: “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.”
Oracle pointed out that the transaction was evaluated and negotiated by a special committee of its board of directors consisting solely of independent directors. “The special committee unanimously approved the transaction on behalf of Oracle and its board of directors,” said Oracle.
NetSuite founder Evan Goldberg, who is also CTO and chairman, said: “NetSuite has been working for 18 years to develop a single system for running a business in the cloud. This combination is a winner for NetSuite’s customers, employees and partners.”
The CEO, Zach Nelson, a former vice-president of marketing at Oracle, 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.” He has been CEO of NetSuite since 2002.
NetSuite’s software relies on database software licensed from Oracle, and it has been closely linked with Oracle since Goldberg set it up in 1998 with the help of an investment of $125 million from Ellison. Ellison and his family still own around 47% of the company.
19h | Alan Burkitt-Gray
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