Boston, MA 06/25/2014 (wallstreetpr) – Oracle Corporation (NYSE:ORCL) has agreed to acquire restaurant and hospitality software maker Micros Systems, Inc. (NASDAQ:MCRS) in what would be the biggest purchase by the company in almost five years and better move than repurchasing its own shares.
Oracle, which is greatly focused on cloud computing, would pay $5.3 billion in cash to takeover Micros Systems. That last time the company made such a big move was in 2009 when it acquired Sun Microsystems for almost $7.4 billion.
The purchase price announced for Micros System indicated $68 per share, which is nearly 18 percent above the price of Micros before the deal was announced. Although Oracle appears to be offering a lot for Micros, the move will enable the company to improve its revenue and earnings significantly and almost immediately.
An added advantage
Micros serves about 330,000 sites in about 180 countries. The company supports point-of-sale systems used by hospitality and restaurant operators. The growth in the industries bodes well for Micros solutions as it means more business deals and higher revenue.
Oracle Corporation (NYSE:ORCL) has built a reputation in enabling multiple industries to transform their businesses by taking advantage of its cloud, mobile, social and big data solutions. Therefore, the acquisition of Micros is just another feather to its cap.
Better than buyback
The move by Oracle Corporation (NYSE:ORCL) to acquire Micros appears to be better than shares buyback in that it will have a long-term and bigger benefit to the shareholders. However, it may take some time before big value is realized but investors will be better served by the acquisition in the long run.
The deal comes at a time when the company struggle to reignite its slow earnings as indicated in the latest quarter. The company suffered 4 percent decrease in profit in the latest quarter while revenue increased only by 3 percent.
Oracle Corporation (NYSE:ORCL) has announced 11 acquisitions within the past 16 months, in what makes the company more like an acquisition machine compared with its rivals.