Oracle to Buy Responsys for $1.5 Billion for Cloud-Based Marketing Tools; Oracle is using acquisitions to embrace cloud computing and shift away from traditional software

December 21, 2013 Leave a comment

Oracle to Buy Responsys for $1.5 Billion for Marketing Tools

Oracle Corp. (ORCL), the world’s largest seller of database software, agreed to buy Responsys Inc. (MKTG) for about $1.5 billion, gaining marketing software that helps businesses sell to consumers.Oracle will pay $27 a share in cash for the company, according to a statement today. That represents a 38 percent premium over Responsys’ closing price yesterday. The transaction is expected to close in the first half of next year.

Responsys, based in San Bruno, California, sells marketing software via the cloud, meaning it’s delivered online. The deal will add to Oracle’s growing cloud revenue, which helped quarterly sales and profit top estimates earlier this week.

Oracle is using acquisitions to embrace cloud computing and shift away from traditional software, which is stored on local computers. Chief Executive Officer Larry Ellison has spent about $50 billion to buy about 100 companies over the past decade, seeking to keep 36-year-old Oracle relevant to customers.

Trading of Responsys shares were halted for the announcement. Yesterday, they climbed 0.7 percent to $19.52 in New York, capping a more than threefold gain this year. Shares of Redwood City, California-based Oracle fell 0.1 percent to $36.55 at 9:47 a.m. today.

Beating Estimates

While its sales and profit growth have slowed in recent years, Oracle’s latest earnings gave investors confidence that the company was weathering the transition. Revenue for the quarter ended in November climbed 2 percent to $9.28 billion, while profit excluding some items was 69 cents a share. Analysts had estimated $9.18 billion in sales and earnings of 67 cents, according to data compiled by Bloomberg.

Responsys develops software that helps marketing executives handle commerce, sales and social networking. It will become part of Oracle’s Customer Experience Cloud, a package of business services. That means chief marketing officers will get the tools they need in one place, said Mark Hurd, Oracle’s president.

“Our strategy of combining the leaders across complementary technologies signifies Oracle’s overwhelming commitment to winning and serving the CMO better than any other software company in the world,” he said in today’s statement.

To contact the reporter on this story: Nick Turner in New York at nturner7@bloomberg.net

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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