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Oracle (ORCL) continues on its enterprise software roll-up strategy. Having already gobbled up dozens of companies including PeopleSoft, it now has plans to buy BEA Systems (BEAS), offering $17 a share, or about $6.7 billion. Oracle offer is 25 percent higher than BEA’s recent closing price. Update: BEA, however, says that’s not good enough.
BEA has been under pressure lately from Carl Icahn, a corporate raider-turned-white knight. Icahn recently campaigned for management changes at Motorola (MOT) and Time Warner (TWX). He has 13% stake in BEA, which according to Dealbook cost him $663 million. That’s worth $871 million, if Oracle gets its way. Or a whopping $208 million in profit for Icahn in less than a month. Now that’s a good life!
Stuart Williams, Senior Analyst, with Technology Business Research gives a thumbs up to the deal:
BEA is a technology-focused firm that should find a good home inside Oracle. Oracle owns the software stack below the BEA middleware (OS and database), around BEA’s offerings (the complete Oracle Fusion Middleware suite), and above BEA’s offerings (applications). Oracle can integrate the BEA technology directly into the core of the Oracle stack, strengthening it, while at the same time removing a competitor and adding close to $1.4 billion in annual revenue to its coffers. TBR believes the potential acquisition is a strong win for Oracle. BEA will help Oracle as the company gears up to combat IBM for the leadership position in the middleware market.