Oracle Corp. (NASDAQ: ORCL) has promised no more large mergers for the near-term, although buying a $1.6 billion company still appears to be fair game for Larry Ellison and his team at the world’s largest CRM player. Acme Packet Inc. (NASDAQ: APKT) is being acquired by Oracle for $29.25 per share in cash. Acme’s Net-Net product family fulfills security, service assurance and regulatory requirements in service provider, enterprise and contact center networks.
This represents close to a 22% profit over the weekend, compared to Acme’s closing bell price of $23.94 on Friday. We will just go ahead and throw out there that law firms probably are already putting up their “notice of investigations,” or perhaps are already preparing formal class action suites, as Acme’s 52-week trading range is $13.26 to $36.27 per share. Oracle said that this represents a fully diluted equity value of $2.1 billion, but net of cash this represents an enterprise value of $1.7 billion. Oracle’s market capitalization rate of $171 billion makes this acquisition hardly even a footnote, and Acme’s expected sales of almost $300 million for 2013 versus the $38 billion or so expected from Oracle makes this deal too small to move the barometer very much.
Here is how the companies describe the combination and the benefits of the deal:
The combination of Oracle and Acme Packet is expected to accelerate the migration to all-IP networks by enabling secure and reliable communications from any device, across any network. Users are increasingly connected and expect to communicate anytime and anywhere using their application, device, and network of choice. Oracle Communications along with Acme Packet can help service providers and enterprises meet these demanding requirements by delivering an end-to-end portfolio of technologies that will support the deployment, innovation and monetization of all-IP networks.
This particular transaction is expected to close during the first half of 2013, but the deal is of course subject to Acme Packet stockholder approval, certain regulatory approvals and other customary closing conditions. Acme’s board of directors already has approved the deal.
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