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Oracle: Larry On the Attack
Following on the heels of Oracle’s acquisition of LogicalApps, a maker of governance and compliance software, Oracle has announced it’s intentions to purchase BEA Systems Inc., a company that helped build the foundation for the Web Services market.
The BEA purchase would be Oracle’s 36th acquisition since 2005. Since that time, the success of Oracle’s aggressive acquisition strategy has surprised many. Things have gone far better for Oracle than even the most optimistic analyst scenarios from three years ago.
Oracle’s assimilation machinery is running so smoothly that it makes the strategy mastermind Larry Ellison seem a bit like superman. Thirty-six purchases. Thirty-six is also the atomic number of krypton, and Krypton is the birthplace of superman. Could number thirty-six further energize Oracle, or could the huge purchase prove to have debilitating effects like kryptonite?
Right now it looks like it is a smart move. Adding BEA to Oracle’s lineup, Oracle would have a strong presence in almost every enterprise software category. If Oracle added BEA to their lineup, they would become the number 2 middleware vendor after IBM. The purchase price of $6.7 billion dollars would be Oracle’s second largest purchase, with the 2003 PeopleSoft purchase being the biggest.
But it’s not at all a done deal. BEA immediately rejected Oracle’s offer, a 25% premium over the company’s market value, as being too low. BEA responded to Oracle saying that “BEA is worth substantially more to Oracle, to others and, importantly, to our shareholders than the price indicated in your letter”.
Carl Icahn, BEA’s biggest shareholder, is pressuring BEA to seek a buyer. So a sale of BEA is likely imminent with potentially IBM and/or HP entering into the bidding, although IBM tends to purchase smaller companies and the BEA price is now twice as much as IBM has ever paid for an acquisition.
This Oracle announcement continues to add pressure on SAP.
