"They don't call it the Internet anymore, they call it cloud computing. I'm no longer resisting the name. Call it what you want."
-Larry Ellison
December 20,2013
Oracle to Acquire Cloud Marketing Provider Responsys, Inc.
martinwolf Transaction Analysis
Financial Overview
- Total Transaction Size: $1.39 Billion
- Implied Enterprise Value (EV): $1.28 Billion
- Implied EV/LTM Revenue: 6.6x
- Share Price Premium: 38%
Transaction Facts
- Oracle (NYSE:ORCL) announced this morning that it was acquiring Responsys, Inc for approximately $1.4 billion.
- The acquisition price, $27 per share, is a 38% premium over Responsys’s Thursday closing price of $19.52.
- Responsys is a marketing automation firm that enables clients to coordinate their online marketing, including email, mobile, display and social advertising capabilities.
- Oracle is one of the IT Industry’s most prominent buyers, with this transaction marking the company’s seventh announced acquisition this year. Other major acquisitions included its March acquisition of Acme Packet and its February purchase of Eloqua (announced December 2012).
Securing a Foothold in a Growing Market
- Online Marketing is a Hot Spot: This deal is the latest in a wave of consolidation sweeping the online marketing space, following Salesforce’s $2.5 billion purchase of ExactTarget and Adobe’s $600 million acquisition of Neola, both in June. Shares of similar marketing firms Marketo (NASDAQ:MKTO) and Constant Contact (NASDAQ:CTCT) are both up on news of this morning’s acquisition.
- Build vs Buy: Oracle continues their strategy of buying assets in spaces where it feels it needs a competitive advantage, preferring the speed of an acquisition instead of building it out.
- Consolidating Capabilities: In their press release, Oracle announced that they would be bringing together Responsys and Eloqua to strengthen their capabilities in the Oracle Marketing Cloud, resulting in a product that served both Business to Business and Business to Consumer needs.
Good News for Oracle Resellers: There have been rumors of Oracle ceding the CRM and marketing space to Salesforce.com, especially after the announcement they the two companies had entered into a strategic partnership for the next nine years. But this deal shows that Oracle is committed to building the attractiveness of their cloud toolbox, to the benefit of Oracle resellers who can now enjoy much stronger offerings. Oracle needs its partners – and this deal has provided a new incentive for both sides.-
A Bright Spot For 2014: The announcement comes on the heels of Oracle hitting a 13-year high closing price yesterday. Oracle previously announced this week that its bookings from selling cloud services were up 35% in the latest quarter and would be a strong source of growth for 2014.
For more information, read the press release. martinwolf was not the advisor in this transaction.
