Oracle buying Micros for $5.3 billion

Hotels aren't the only thing being traded for big bucks. Hotel software is just as lucrative.

Oracle Corp. has reportedly agreed to buy Micros Systems for $5.3 billion. Bloomberg writes that the move is an attempt by CEO Larry Ellison "to reignite slowing growth by adding software for hotels and restaurants."

As Ellison said in the latest earnings report, "We plan to increase our focus on the cloud and become number one in both the SaaS and PaaS businesses." The buyout of Micros Systems would seem to be part of the plan, 24/7 WallSt writes.

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Micros is a provider of information technology solutions for the hospitality and retail industries. More specifically, it produces and sells computer hardware and software that are used in restaurants, hotels and specialty retail markets, while Oracle is known for its database management systems and other cloud-based products.

Micros stockholders will get $68 a share in cash, 18 percent more than the closing price on June 16. Word is Oracle came close to acquiring Micros six years ago, but the deal fell aprt at the last minute.

Once the deal is finalized, it will be Oracle’s largest acquisition since it bought Sun Microsystems for $7.4 billion in 2009.

"Oracle has successfully helped customers across multiple industries, harness the power of cloud, mobile, social, big data and the internet of things to transform their businesses," said Oracle President Mark Hurd. "We anticipate delivering compelling advantages to companies within the Hospitality and Retail industries with the acquisition of Micros."

"Micros has been focused on helping the world's leading brands in our target markets since we were founded in 1977, including running more than 330,000 sites across 180 countries today," said Peter Altabef, president and CEO of Micros. "In combination with Oracle, we expect to help accelerate our customers' ability to innovate and differentiate their businesses by utilizing Oracle's technologies, cloud solutions, and scale. We are very excited about the great opportunities this will create for our customers and employees."

According to Bloomberg, Oracle has acquired about 100 companies in the last decade, spending as much as $50 billion. But after a late entry to the cloud-computing market, sales have declined or gained less than 5 percent in each of the past 11 quarters as customers gravitate to rivals selling Internet-based software.

"Oracle was clearly late to the cloud," Daniel Ives, an analyst at FBR Capital Markets & Co., told Bloomberg. "They are starting to make changes, but this would be another step in terms of recognizing what they need to do."

"Micros gives them a strong foothold in the hotel and hospitality industry," Richard Williams, an analyst at Summit Research Partners, also told Bloomberg. "That will be an important asset for them and will tie well into their other systems such as their engineer systems and cloud-related offerings."

Dealmaking in the technology space is accelerating as established software companies try to navigate the shift to cloud computing and fend off challenges from new competitors. This month, SanDisk Corp. agreed to buy Fusion-io Inc., which provides storage to Facebook and Apple, for about $1.1 billion.
 

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