Enterprise software provider Oracle Corp. (ORCL) agreed Monday to acquire network gear maker Acme Packet, Inc. (APKT) for $29.25 per share in cash or about $1.7 billion, net of Acme Packet's cash. The deal, unanimously approved Acme Packet board of directors, is expected to close in the first half of 2013.
The deal represents a fully diluted equity value of $2.1 billion, and an enterprise value of $1.7 billion, net of cash. The offer price of $29.25 represents a 22.2 percent premium over Acme Packet's closing price of $23.93 on Friday. Acme shares are currently trading higher by 21.69 percent in early deal in a bid to match the offer price.
The deal is primarily subject to Acme Packet stockholder approval, regulatory and other customary closing conditions. Bedford, Massachusetts-based Acme Packet enables the trusted, first-class delivery of next-generation voice, data and unified communications services and applications across IP networks. The company's solutions are deployed by more than 1,900 service providers and enterprises globally, including 89 of the world's top 100 communications companies.
The proposed deal will help Redwood City, California-based Oracle add session border control technology to its leading communications industry offering to speed the deployment of all-IP network. The combination is expected to accelerate the migration to all-IP networks by enabling secure and reliable communications from any device, across any network.
The deal will boost Oracle's overall strategy to deliver integrated best-in-class products that address critical customer requirements in key industries.
"Acme Packet brings deep domain expertise and proven, mission-critical solutions to enable all- IP networks. Together with Oracle, we expect to provide customers with purpose-built, innovative solutions to accelerate the deployment of all-IP networks and help deliver a superior experience across services, devices and networks," Acme Packet CEO Andy Ory said in a statement.
Oracle said it 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.
Separately, Acme Packet reported a loss for the fourth quarter compared to a profit last year, hurt mainly by lower revenues. Net loss was $2.03 million or $0.03 per share, compared to a profit of $8.72 million or $0.12 per share in the year-ago quarter. Excluding items, adjusted earnings were $6.47 million or $0.09 per share.
On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $0.08 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues dropped to $70.70 million from $83.0 million last year. Analysts expected revenues of $68.86 million.
ORCL closed Friday's regular trading session at $36.21, down $0.66 on a volume of 27.73 million shares. In the past 52-week period, the stock has been trading in a range of $25.33 to $36.31.
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