Subsequent the company's (N) $109 per share, cash merger with Oracle (ORCL +2%) effective today. With doubt cast over the deal prior to formal disclosure late Friday that tender conditions were to be met, NetSuite shares had been trading around an unconvinced $94 level, though are consequently now to a halted $108.99.
Approximately 21.775M (20.4M required) unaffiliated shares tendered, representing 53.21% of total unaffiliated share count. Overall shares tendered amount to 62.3M, or 76.39% of total issued and outstanding shares.
To $92.89. Oracle's (ORCL +0.6%) offer for NetSuite (NYSE:N) at $109 per share is set to expire tomorrow should minimum tender conditions (20.4M out of 40.8M total unaffiliated shares) not be met beforehand.
Brocade Communications (NASDAQ:BRCD) is up 22.3% and hanging right at 52-week high range after news that it's in talks to sell itself and getting close to the end of that process.
A deal could be announced this week, Bloomberg reports, and one of the interested parties is reportedly Broadcom (AVGO +0.7%), which could be interested in supplementing its switch-chip business with Brocade's networking gear. Broadcom CEO Hock Tan has said he's interested in acquisitions.
Such a deal might allow for better competition against much bigger rival Cisco Systems (CSCO +0.4%). "A purchase by Broadcom (Avago) would be a strategic move by Broadcom to vertically integrate in an IP switching and routing market that has increasingly moved to merchant silicon," notes Stifel analyst Aaron Rakers.
He's maintained a Hold rating and $10 price target (the boost today has put Brocade at $10.63). He doesn't know any inside information about activity around Brocade this week but notes that for years, talk has persisted that Brocade might sell itself to suitors like H-P (NYSE:HPQ), Oracle (NASDAQ:ORCL) or IBM (NYSE:IBM).
With current net debt (about $440M) and at $11/share, Brocade would come at about a $4.9B enterprise value, 7.3 times EBITDA, he says.
Oracle's set a final, November 4, deadline for tender expiration involving the deal. Should minimum terms (20.4M affiliated shares, 40.8M unaffiliated shares) not be met, Oracle plans to terminate the arrangement.
Analyst Kash Rangan projects if this happens, NetSuite shares would fall dramatically. His current price target is $68, NetSuite's current price is hovering around $100.
Deal offered at $109 per share terms.
NetSuite (N -0.8%) and Oracle (ORCL -0.1%) are both are trading 7% lower since the plan was fist announced in late July.
With Oracle (ORCL +0.6%) looking to take its presence in the cloud to greater heights, an increased focus on security is critical. Oracle's SVP of Identity Management and Security Products Peter Barker: "Together, Oracle and Palerra will help accelerate cloud adoption securely by providing comprehensive identity and security cloud services. The combination of Oracle Identity Cloud Service (IDaaS) and Palerra’s CASB solution plan to deliver comprehensive protection for users, applications and APIs, data, and infrastructure to secure customer adoption of cloud."
Palerra was founded in 2013 and its team is expected to join Oracle. Terms of the deal were not disclosed.
In a Bloomberg interview, Marc Benioff comments that Oracle's (NASDAQ:ORCL) NetSuite (NYSE:N) acquisition marks a "desperation move" and doesn't feel Oracle will become a stronger CRM competitor because of it. He goes on to cite Larry Ellison's largest NetSuite shareholder status and claims the company was something he simply wanted to have.
The $9.3B, $109 per share deal was announced in July, though some recent pushback by shareholder T. Rowe Price to the terms have complicated its closing.
Oracle reports Q1 2017 results on Thursday with its share price moderately lower (2.45%) since the NetSuite deal was disclosed. Salesforce (NYSE:CRM), meanwhile, has also realized issues of late, trading down 8% since releasing its Q2 report on the last day of August.
Oracle (ORCL -0.1%) and NetSuite (N +18%) are expected to "coexist in the marketplace forever" according to Oracle CEO Mark Hurd.
Today's deal signifies a move by Oracle to strengthen its cloud position in the ERP, CRM, e-commerce and PSA spaces.
Most notably, though, is NetSuite's command of the cloud ERP market. The company notes its solution is "the world's most deployed" and counts more than 30,000 customers in more than 160 countries.
The buyout immediately enables Oracle's access to NetSuite's clients, typically smaller and more medium-sized businesses than the larger enterprises Oracle has conventionally provided services to.
Merging Oracle's existing initiatives with NetSuite's platforms and clientele in these spaces registers Oracle increasingly competitive in an enterprise cloud market already filled with strong offerings from Salesforce, Microsoft, SAP, IBM and others.
Consequently, cloud players comparable in size to NetSuite pre-deal are now up against a much larger opponent.
Believing Oracle's (ORCL +1%) valuation now reflects a high level of database pessimism and that cloud subscription revenue growth will surpass software license declines in FY17 (ends May '17), Evercore's Kirk Materne has upgraded Oracle to Buy. His target remains $44.
Materne expects shares to re-rate in the coming quarters as estimates bottom. The call comes three weeks after Oracle sold off in response to the soft FQ3/FQ4 guidance provided with mixed FQ2 results. Total software/cloud revenue is forecast to rise just 3%-4% and 1%-3% Y/Y in constant currency in FQ3 and FQ4, as strong SaaS/PaaS cloud growth (49%-53% and 55%-59%, respectively) is offset by license declines.
Separately, Oracle has announced the acquisition of AddThis, a company that provides both social sharing, content recommendation, and personalized marketing tools for Web publishers, and audience data and analytics services for brands/ad agencies that leverage data provided by the publisher tools. Sources speaking with TechCrunch suggest Oracle paid $100M-$200M.
Oracle asserts AddThis' publisher tools power 15M sites, and suggests the company's offerings will be added to its Data Cloud platform, which provides companies and marketers with a slew of tools for measuring and analyzing consumer audiences to help with ad targeting and content personalization.
The company has previously bought online-to-offline data provider Datalogix, cloud marketing data services provider BlueKai, online ad campaign software firm Maxymiser, and cloud marketing automation software firms Eloqua and Responsys, as it battles the likes of IBM, Adobe, and Salesforce in the ad tech software/services space.