Enterprise software giant Oracle Corp. (ORCL) agreed Thursday to acquire cloud-based software company Taleo Corp. (TLEO) for $46 per share or about $1.9 billion, net of Taleo's cash and debt.
The deal, which has the unanimous approval of Taleo board, is expected to close in the middle of 2012, and is primarily subject to Taleo stockholder approval. Both the companies will continue to operate independently, and it is business as usual, until the deal closes.
The offer price of $46 per share represents an 18 percent premium to Taleo's closing price of $38.94 on Wednesday. Taleo shares are currently trading higher by $6.60 or 16.95 percent at $45.54.
"Human capital management has become a strategic initiative for organizations. Taleo's industry leading talent management cloud is an important addition to the Oracle Public Cloud," said Thomas Kurian, Executive Vice President, Oracle Development.
The proposed acquisition of Dublin, California-based Taleo will add a leading talent management cloud offering to the Oracle Public Cloud. The talent management cloud helps organizations attract, develop, motivate and retain human capital to improve performance and drive growth.
In early October 2011, Oracle introduced a new service called the Oracle Public Cloud for its customers and partners, making available most of its business management software on the cloud. Customers and partners are able to install and run the programs themselves. Later in October, it agreed to buy online customer-management software provider RightNow Technologies Inc. for $1.5 billion, and closed the deal in late January.
Taleo's cloud manages 15 percent of all US hires and is one of the world's largest cloud deployments with nearly 16 billion transactions per year, and over 5,000 enterprises of all sizes relying on it.
The combination will create a comprehensive cloud offering for organizations to manage their human resource operations and employee careers. It will also empower employees and managers to effectively manage careers throughout their entire employment, enable organizations to retain talent and optimize costs.
"Taleo's integrated cloud-based talent management solutions optimize how organizations hire, manage, develop and reward their employees and gives companies the intelligence needed to capitalize on their most critical asset -- their people. Joining forces with Oracle gives us the opportunity to better serve our customers," Taleo Chairman and CEO Michael Gregoire noted.
Separately, Taleo reported a loss for the fourth quarter that widened from last year, hurt by higher expenses. Net loss widened to $911,000 from $620,000 in the prior-year quarter, loss per share for the quarter remaining unchanged at $0.02 per share.
Adjusted net income grew to $11.61 million or $0.26 per share from $9.76 million or $0.23 per share in the year-ago quarter. Analysts polled by Thomson Reuters expected the company to report earnings of $0.23 per share for the quarter. Analysts' estimates typically exclude special items.
Net revenues for the quarter rose 26 percent to $84.77 million from $67.22 million in the same quarter last year. Adjusted net revenues grew 21 percent to $86.34 million from $71.15 million in the prior-year quarter. Eighteen Wall Street analysts had a consensus revenue estimate of $86.77 million for the quarter.
In Thursday's regular trading session, ORCL is currently trading at $28.42, down $0.30 or 1.08 percent on a volume of 9.05 million shares. In the past 52-week period, the stock has been trading in a range of $24.72 to $36.50.
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