Oracle is no stranger to making big acquisitions. Oracle's first big acquisition of 2013 will be Acme Packet, in a deal valued at over $2 billion in cash and stock.
Oracle will pay $29.25 per Acme Packet (APKT) share, which is a 22 percent premium over the $23.93 the stock closed at on Friday afternoon. The stock portion of the acquisition is valued at $1.7 billion. The deal still requires the approval of Acme Packet shareholders and is expected to formally close in the first half of 2013.
Acme Packet's core product is Session Border Controller (SBC) technology that is critical to the operation of unified communications and voice networks. The goal for Oracle with the acquisition is to help accelerate the move towards all IP networks.
"The addition of Acme Packet to Oracle’s leading communications portfolio will enable service providers and enterprises to deliver innovative solutions that will change the way we interact, conduct commerce, deliver healthcare, secure our homes, and much more," Oracle President Mark Hurd stated.
In a letter to customers and partners, Bhaskar Gorti, Senior Vice President and General Manager for Oracle Communications, commented that he expects that the employees and management of Acme Packet will join the Oracle Communications Global Business Unit after the deal close.
"Oracle plans to make Acme Packet a core offering in its Oracle Communications portfolio to enable customers to more rapidly innovate while simplifying their IT and network infrastructures," Gorti wrote.
Acme Packet's core Session Border Controller (SBC) technology is used by both service providers and enterprise customers. SBC enables voice and data to securely operate on a network in controlled sessions.
Oracle's acquisition of Acme Packet comes at a challenging time for Acme Packet as the company is experiencing slow to negative growth.
Acme Packet released its fourth quarter fiscal 2012 earnings today. Revenue came in at $70.7 million which is a decline from the $83.0 million reported for the fourth quarter of 2011. The company also reported a Net Loss of $2.0 million which is a decline from the Net Income of $8.7 reported a year ago. The full year picture shows similar declines with revenue reported at $274.44 million down from $307.32 million in 2011.