Oracle is building a bigger cloud. The software giant has agreed to buy NetSuite for $9.3 billion, bolstering the company’s cloud-computing offerings.
Oracle is paying $109 per share in cash for NetSuite, a 19% premium to the company’s closing price Wednesday of $91.57. The deal is expected to close in 2016, subject to regulatory and shareholder approval.
The deal, among the largest in Oracle’s history, reunites Chairman Larry Ellison with Zach Nelson, NetSuite’s CEO, who ran Oracle’s marketing operations in the 1990s. Ellison is NetSuite’s largest investor with nearly 40% ownership through entities owned by Ellison and his family.
Both companies compete in the enterprise-resource planning space . “Oracle and NetSuite cloud applications are complementary, and will coexist in the marketplace forever,” said Mark Hurd, Chief Executive Officer, Oracle. “We intend to invest heavily in both products—engineering and distribution.”
“We expect this acquisition to be immediately accretive to Oracle’s earnings on a non-GAAP basis in the first full fiscal year after closing,” said Safra Catz, Chief Executive Officer, Oracle.
In pre-market trading today, shares of NetSuite rose 18% to $108.30, while Oracle shares added 1.9% to $41.70.