Taleo Corporation (NASDAQ: TLEO) is surging this morning after earnings because it is being acquired. The stock is the most active pre-market stock on the NASDAQ so far. Shares are up 17% at $45.55 on the news against a close of $38.94. The buyer is Oracle Corporation (NASDAQ: ORCL) at $46.00 per share, and the move is for more cloud-based software. Oracle should not get hit too hard because this is a $1.9 billion deal. The interesting financial aspect of this merger is that Taleo has been expensive at about 38-times earnings before this premium. Earnings on an organic basis were only expected to grow about 10% to $1.13 in 2012 (from $1.03 expected in 2011). Thomson Reuters was expecting Taleo sales to reach $379.24 million in 2012. Not a cheap deal, but for a company the size of Oracle it is probably not much of a hit. Actually, Oracle is trading up marginally when some other acquisition companies might have traded lower.
Oracle Buys Cloud-Based Software Player Taleo (TLEO, ORCL)
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Jon C. Ogg
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Jon C. Ogg →
Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
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