Oracle Corp. is buying cloud company NetSuite Inc. in a deal valued at $9.3 billion, combining two Silicon Valley firms that both count Larry Ellison as a founder and top shareholder.
Oracle Chief Executive Mark Hurd said the companies' cloud applications complement each other. "We intend to invest heavily in both products _ engineering and distribution," he said Thursday in a statement.
Both companies provide enterprise-resource planning software, or systems that streamline business operations such as inventory management, accounting and human resources.
NetSuite, based in San Mateo, is a leader in the subscription-based, on-demand variety of such software. Oracle, based in nearby Redwood City, is one of the nation's largest software companies. According to FactSet, Ellison owns a 27 percent stake in Oracle, where he is chairman, and a 40 percent stake in NetSuite.
Under the deal, NetSuite stockholders are to receive $109 a share, a 19 percent premium over the Wednesday closing price of $91.57.
The transaction is expected to close this year.
The NetSuite deal continues a spate of acquisitions by Oracle. In recent months, the software giant acquired Opower Inc. and Textura Inc., which make cloud software for the utility and construction industries, respectively. Each of those deals was valued at more than $500 million.
It also paid $5.3 billion in 2014 for Micro Systems Inc., a maker of Internet-connectable cash registers.
"This NetSuite transaction is a bit different," said Jack Andrews, vice president and senior research analyst at D.A. Davidson & Co.
"On the last earnings call, Ellison was talking about how it's a stretch goal for the company to be the first software company to reach $10 billion in revenue. This acquisition of NetSuite is going to get them closer to that goal," he said. "NetSuite has dealt with more mid-market opportunities and smaller businesses."
Oracle shares were down 0.1 percent to $40.88 around midday. NetSuite's stock was up 18 percent to $108.07.
