Oracle finally buys Micros Systems for $4.6 billion, including Micros' cash

As had been widely expected, Redwood City tech giant Oracle on Monday agreed to buy Micros Systems for $5.3 billion, which works out to $4.6 billion after including Micros’ cash. That makes it the biggest deal Oracle has done since it bought Sun Microsystems for $7.4 billion in 2010.

Based in Columbia, Maryland, Micros makes software and hardware for hotels, restaurants and other retailers. Its board has approved the transaction, which the companies said is expected to be completed in the second half of this year.

“We anticipate delivering compelling advantages to companies within the hospitality and retail industries with the acquisition of Micros,” Oracle President Mark Hurd said in a news release.

“Micros has been focused on helping the world’s leading brands in our target markets since we were founded in 1977,” added Micros CEO Peter Altabef, who also was quoted in the release. “We are very excited about the great opportunities this will create for our customers and employees.”

The deal had been rumored for days and analysts seemed warm to the purchase, because the hospitality market is lucrative and Micros would help boost Oracle’s bottom line.

But in a note to his clients after the announcement, Daniel Ives, an analyst with FBR Capital Markets, said Oracle will need to make more such acquisitions to rev up its revenues, which have failed to impress investors in recent quarters.

“We view this morning’s Micros deal as just the start of what we expect will be a surge of M&A activity for Oracle over the coming year, as it is clear to us that the company needs to quickly put more ‘growth fuel in its engine’,” he concluded. He added that Oracle’s leaders “have some work ahead of themselves to morph Oracle into its next phase of growth,” which will involve emphasizing so-called cloud, or Internet-based, services.

Photo by Pat Tehan, Mercury News

Steve Johnson Steve Johnson (264 Posts)

Steve Johnson covers the microchip industry, cyber security and the big-technology sector that includes Hewlett-Packard, Oracle and Cisco Systems.