Oracle to Acquire Agile Software for $495M, 14% Premium

Oracle announced Tuesday it has agreed to acquire Agile Software, a product lifecycle management [PLM] software solutions provider, for $495 million in cash, or $8.10/share. This represents a 14% premium to Agile's close of $7.08 on Tuesday. "The addition of Agile, which will serve as the foundation of our PLM offering, will further Oracle's strategy of delivering industry-specific enterprise applications and allows us to offer yet another strategic application to SAP customers," said Oracle President Charles Phillips. MarketWatch reports a Bank of America analyst recommended Oracle to clients earlier in the day based on its M&A activity, saying, "We expect this strategy should continue to benefit the company in terms of winning further wallet share from smaller competitors, and should also yield results in terms of broadening the company's customer base in specialized niche markets." Shares of Oracle lost 0.5% to $18.84 during normal trading, but edged up 0.2% to $18.88 in the after-hours. Agile last traded up nearly 13% to $7.98 in extended trading.

Sources: Press release, MarketWatch, The Wall Street Journal
Commentary: Oracle Rewrites Its Middleware • Oracle: Looking Toward Stronger SaaS Revenue Flow • SAP Buys OutlookSoft in Oracle Counter-Tack
Stocks/ETFs to watch: Oracle (ORCL), Agile Software (AGIL). Competitors: SAP (SAP), IBM (IBM), Microsoft (MSFT). ETFs: iShares Goldman Sachs Software Index Fund (IGV), Software HOLDRS Trust ETF (SWH), PowerShares Dynamic Software (PSJ), B2B Internet HOLDRs (BHH)
Conference call transcripts: Oracle F3Q07

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Comments

[Mr. Finance:]

Here is an excerpt from May 15, 2007 post on the NewsVisual.com blog titled "Oracle Leverges the Board to Buy Agile"

The following IntellectSpace Knowledge Map illustrates common connections between Oracle and Agile board members, and shows relationships of players who likely played key roles in the acquisition discussions.

For example, the Knowledge Map shows how Larry Ellison, Chairman of Oracle, shared a board seat with Gareth Chang on Apple's board who is also a board member of Agile (past board seats are denoted by dotted blue lines).

Common relationships between Oracle and Agile also include university ties, particularly University of California at Berkeley, Stanford University, and Santa Clara University. Lastly, the Knowledge Map reveals that Sun Microsystems and Flextronics connected two board members of Oracle with two board members of Agile.

It is a good indicator for both parties in an acquisition to have deep board ties, because board synergies often translate to post-merger corporate synergies.

For an interactive version of this Knowledge Map, please reference the following URL using an Internet Explorer browser: fn.intellectspace.com/...

2007 May 16 06:11 PM