New York Stock exchange listed Oracle has agreed to offer US$27 per share for all the outstanding stock of NASDAQ listed Responsys in a transaction worth approximately US$1.5 billion.
Responsys had been trading just under US$20 per share immediately prior to the bid so the bid reflects a premium of about 38%. Responsys itself had only gone public in 2011 at a price then of US$12 per share, so the shareholders have every reason to be quite happy.
Responsys is used by its many business to consumer (B2C) customer brands to organize their marketing to their own customers across multiple platforms, including email, mobile, social, display and the internet on a massive scale.
The Board of Directors of Responsys has unanimously approved the transaction and the deal is expected to close in the first half of 2014. A necessary prerequisite is the tender of a majority of Responsys’ outstanding shares and vested options, satisfying SEC or other regulatory requirements and the usual customary closing conditions.
Coming after their joint marketing arrangements announced six months ago with Salesforce.com, as reported in Jewish Business News on June 26th. this acquisition now represents another element in Oracle’s push to beef up its presence in the cloud to avoid being sidelined by newcomers in what is still a new and rapidly evolving area of business.
“Recognizing the unique needs of the Chief Marketing Officer (CMO) in business to business (B2B) and B2C industries, the Oracle Marketing Cloud is now the only platform to unite enterprise-class leaders in these historically distinct marketing-automation fields, ” said Mark Hurd, President of Oracle.
“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.”
“Responsys has always been focused on helping marketers realize their largest opportunity – coordinating their marketing touch points across channels, across the customer lifecycle, and across industries, and as a part of Oracle, we will only accelerate our efforts, ” said Dan Springer, CEO of Responsys.
“Oracle not only shares our vision, but is the proven leader in bringing together best-in-class technologies and companies to realize the largest enterprise opportunities. We couldn’t be more excited about what this means for our customers and employees.”
Oracle say they will now combine Responsys with Eloqua, another cloud marketing company it bought just a year ago for US$871 million. The two together will then comprise what Oracle is pleased to call its “Customer Experience Cloud”, which includes Commerce, Sales, Service, Social and the existing Oracle Marketing Cloud.
Now for the first time, according to Oracle, CMOs that support industries with B2C or B2B business models will be equipped to drive their customer experiences across marketing interactions and throughout the customer lifecycle from a single platform.
Oracle has bought Eloqua and is buying Responsys; Salesforce.com itself bought ExactTarget for US$2.5 billion in June, as reported in Jewish Business News here [link]. So who is left to compete against them, or to be acquired by others?
According to AllThingsDigital, Constant Contact and Marketo are both publicly listed small cloud marketing companies that are players in the game. And of course other large software houses such as SAP will not be standing idly by either, though being European based may not be used to moving quite as fast as some of their Silicon Valley competitors.
Oracle is a multinational enterprise level software company with US$37 billion of revenue in its last full fiscal year to February 28th 2013. Its recent market capitalization is US$165 billion and Larry Ellison still owns about 24% of the company.
The company today has over 400, 000 customers including all 100 of the Fortune top 100 companies. It employs over 120, 000 people world-wide, and has more than 15 million third party developers who operate within the Oracle database and enterprise and cloud marketing spaces. Oracle also supports approximately 2.5 million students each year.
Based in Redwood City California the company specializes in developing and marketing computer hardware systems (purchased originally from Sun) and enterprise software products, and especially its Oracle brand database management systems.
Oracle is the world’s second largest software supplier after Mircrosoft.
The company builds tools for database development, systems of middle-tier software, enterprise resource planning software (ERP), customer relationship management software (CRM) and supply chain management software (SCM).
Larry Ellison was a co-founder of Oracle, which began in 1977 as Software Development Laboratories and has served continuously as its CEO. In 1986 the company went public as Oracle Systems Corporation. In 1995 it changed its name to Oracle Corporation for the holding company and simply to Oracle for the business operating entity.
Oracle trades at a P/E ratio recently of about 15 times its trailing twelve-month earnings. Even so, growth in recent quarters has been relatively static which has called into question the very high pay that its CEO is awarded, with a number of disgruntled institutional shareholders having voiced public complaints and non-binding resolutions on pay at the annual meeting.
In its most recent earnings release, however, a few days ago Oracle reported moderate growth again, of about 5%, in its GAAP earnings per share for its second fiscal quarter to November 30th, 2013. Now the US economy has resumed growth Oracle could well be a significant beneficiary having beefed up its pipeline of cloud related and enterprise products.
About Larry Ellison
Larry Ellison, who is aged 69, was born in 1944 and was raised by his mother’s aunt and uncle. Though Jewish he today professes agnosticism in his own belief systems, and when he became thirteen chose not to have a bar mitzvah.
Ellison says today that he has a love affair with Israel that is not in any way connected to religious sentiments, but rather due to the innovative spirit of Israelis, particularly in the technology sector
After growing up in a middle class Jewish neighborhood of Chicago and graduating from high school there, he attended classes at the University of Chicago. He eventually dropped out to move to California where he found his true métier in the world of hi-tech, working initially for the Ampex Corporation.
While there he worked on a database project for the CIA which he named “Oracle”. In 1977 he founded his own company, with some partners, which was to grow and flourish and to become today’s Oracle Corporation.
With a net worth estimated by Forbes in September 2013 to be US$41 billion it lists him as the fifth richest man in the world.
In September Larry Ellison’s Team Oracle recently pulled off one of the most extraordinary sporting achievements of all time, coming back from a seven-race deficit, to win its second consecutive America’s Cup sailing trophy. Jewish Business News reported on the entire race series, including the trophy deciding final race here .