Oracle announced Monday that it will acquire Micros Systems for $5.3 billion, or $4.6 billion net of cash. Billionaire Larry Ellison’s technology giant will pay $68 per share for Micros, which builds technology for the hospitality and retail industries.
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The deal provides a $2.23 premium over Micros’ closing price Friday. However, the stock soared almost 15% Tuesday when reports of a deal first surfaced and sent the stock to a fresh 52-week high. The deal adds more than $10 of per share value to Micros going price before the leak.
Last week FORBES’ Alex Konrad reported that many analysts saw the deal as a boon for both companies. Wedbush analyst Gil Luria told Konrad, “Oracle has a lot of other verticals and this would be a vertical investment for them, and a sensible move.”
In a note on the deal Summit Research Partners analysts Richard Williams and Srini Sundararajan wrote, “We think a deal could make sense from a number of perspectives. One aspect would be vertical expertise in parts of retail that are spending increasing amounts on IT infrastructure. Another would be to provide tighter integration between Oracle’s database and software stack for hotel retailers.”
Analysts have also noted that joining Oracle would help Micros expand internationally. In a statement on the deal Micros CEO Peter Altabef said, ”In combination with Oracle, we expect to help accelerate our customers’ ability to innovate and differentiate their businesses by utilizing Oracle’s technologies, cloud solutions and scale.”
Micros shares were up more than 3% to $67.82 Monday morning. Oracle shares were up a few cents to near $41.
The deal is expected to close in the second half of 2014 and to begin adding to Oracles’s non-GAAP earnings immediately. Williams and Sundararajan also pointed out that since Oracle missed earnings late last week the large deal may “fuel growth for a couple of quarters in lieu of organic growth.”