Oracle (ORCL) Screws IBM (IBM), Buys Sun (JAVA)

By Douglas A. McIntyre Updated Apr 28, 3:18AM EDT · Published Apr 20, 6:40AM EDT

Larry Ellison, who built his reputation on being bad and bold, just got badder and bolder. His Oracle (ORCL) bought Sun (JAVA) making an end-run around IBM (IBM), which had hoped to pick up the server company and was close to an offer three weeks ago. Whatever rug may have been under the IBM deal got pulled out.

The buyout continues a long string of large acquisitions by Oracle and gives it a large footprint in the server market. Oracle is already the largest provider of enterprise software in the world, so it can sell Sun servers to its existing customer base.

Oracle and Sun Microsystems entered into a definitive agreement under which Oracle will acquire Sun common stock for $9.50 per share in cash. The transaction is valued at approximately $7.4 billion, or $5.6 billion net of Sun’s cash and debt.

That is a little less than IBM might have been willing to spend, but it takes what might have been an important chess piece in the global competition for selling technology to enterprises away.

Douglas A. McIntyre

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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

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A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.