Oracle looks to boost growth with biggest deal in five years

Mon Jun 23, 2014 1:12pm EDT
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By Abhirup Roy

(Reuters) - Oracle Corp (ORCL.N: Quote) said it would buy Micros Systems MCRS.O in a $5.3 billion deal as the world's No.2 business software maker looks to boost flagging growth through acquisitions.

The purchase of Micros, which makes point-of-sale hardware and software for restaurants and hotels, is the first multi-billion dollar acquisition by Larry Ellison-led Oracle in five years and follows disappointing fourth-quarter results.

Analysts said the acquisition could be first in a string of deals for Oracle, which has been stung by aggressive pricing by companies such as Inc (CRM.N: Quote) and Workday Inc (WDAY.N: Quote) for their software and internet-based products.

"I think this is really Larry Ellison looking in the mirror realizing the need to get aggressive yet again on M&A," FBR Capital Markets analyst Daniel Ives told Reuters.

"It is clear to us that the company needs to quickly put more 'growth fuel in its engine' to catalyze growth in the top-line," Ives said.

The Micros deal fits with Oracle's plan to expand its fast-growing cloud business, where it has been a late entrant.

Micros sells internet-connected cash registers and provides a host of cloud-based services such as e-commerce and customer relationship management to hotels and restaurant chains, including Louvre Hotels, TGI Friday's and Yum Brands Inc (YUM.N: Quote).

Micros' full-year revenue rose 15 percent to $1.27 billion in the year ended June 2013.   Continued...

The company logo is shown at the headquarters of Oracle Corporation in Redwood City, California in this February 2, 2010 file photograph.  REUTERS/Robert Galbraith/Files