Oracle (NASDAQ:ORCL), the Pac Man of enterprise software, today announced a deal to swallow yet another company, this time business intelligence software provider Hyperion Solutions (HYSL). Oracle will pay $52 a share in cash, or about $3.3 billion. In pre-market trading, Hyperion shares are up $8.91, or 20.8%, at $51.75.
The news is pressuring shares of Hyperion rivals Cognos (COGN) and Business Objects (BOBJ). Why? Well, two obvious reasons. One, Hyperion looks like a lot scarier competitor as part of Oracle than as a standalone business. And two, if Oracle is buying Hyperion - and there has long been speculation that the company would make a move to buy a player in business intelligence software - than it likely is not going to buy either of the other two.
Oracle said it expects the deal to be accretive on a non-GAAP basis by at a least a penny a share in fiscal 2008 and by at least four cents in fiscal 2009. The company said it expects “substantial revenue synergies and significant economies of scale.”
Also, Oracle can never let an opportunity go by for taking a dig at rival SAP (NYSE:SAP) - and this is no exception. "Hyperion is the latest move in our strategy to expand Oracle’s offerings to SAP customers,” said Oracle President Charles Phillips in the company’s announcement of the deal:
Thousands of SAP customers rely on Hyperion as their financial consolidation, analysis and reporting system of record. Oracle already has PeopleSoft HR, Siebel CRM, G-Log, Demantra, i-flex, Oracle Retail, and Oracle Fusion Middleware installed at SAP’s largest ERP customers. Now Oracle’s Hyperion software will be the lens through which SAP’s most important customers view and analyze their underlying SAP ERP data.
Cognos is down 15 cents to $37.96 in pre-market trade; more dramatically, Business Objects is down $2.03 at $34.07. Oracle shares, meanwhile, are off 5 cents at $16.38. SAP is down 91 cents pre-market at $45.11.
ORCL vs. SAP vs. COGN vs. BOBJ vs. HYSL 1-yr chart