Oracle buying cloud pioneer NetSuite for $9.3 billion

Oracle is buying NetSuite for $9.3 billion, spending big to boost its position in the battle for the cloud.

The Redwood City software giant competes with companies such as Salesforce, Workday, Microsoft and Amazon in providing cloud-based services. Buying San Mateo-based NetSuite will bolster its customer-relationship management software offerings.

“Oracle and NetSuite cloud applications are complementary, and will coexist in the marketplace forever,” said Mark Hurd, co-CEO of Oracle, in the company’s announcement of the deal Thursday.

Oracle is offering $109 a share in cash, a 19 percent premium to NetSuite shares’ Wednesday closing price of $91.57. The deal is expected to close this year after shareholders and regulators approve it.

Oracle Chairman Larry Ellison was an early investor in NetSuite, which was founded in 1998 and is touted as “the first cloud company,” and is its largest shareholder.

Evan Goldberg, founder and chief technology officer of NetSuite, and CEO Zack Nelson are both formerly of Oracle.

“NetSuite will benefit from Oracle’s global scale and reach to accelerate the availability of our cloud solutions in more industries and more countries,” Nelson said in the press release.

NetSuite had 4,682 full-time employees as of March 31, 2016, according to an SEC filing. When reached by SiliconBeat, an Oracle spokewoman would not comment about whether the deal would lead to job cuts.

NetSuite released second-quarter results today but canceled its conference call because of the pending acquisition. The company reported $230.8 million in revenue, a 30 percent increase from the year-ago period, and a loss of 47 cents per share, both of which beat Wall Street’s expectations.

Oracle has been on a bit of a shopping spree; the NetSuite deal is its sixth, and most expensive, this year. Among its pickups in the cloud aisle were utility software maker Opower in May, construction industry software maker Textura in April and enterprise company Ravello Systems in February.

Shares of NetSuite are soaring 18 percent to about $108 this morning, while Oracle shares are about flat.

[graphiq id=”i8k7fzqWygd” title=”Netsuite Inc. (N) Stock Price” width=”600″ height=”629″ url=”” link=”” link_text=”Netsuite Inc. (N) Stock Price | FindTheCompany” ]

Photo: Zach Nelson, president and CEO of NetSuite, in San Mateo in 2006. (John Green/San Mateo County Times)


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