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What Value Will Responsys Add To Oracle Corporation (NYSE:ORCL)?

Boston, MA 12/26/2013 (wallstreetpr) – Oracle Corporation (NYSE:ORCL) is expected to close its $15 billion acquisition of Responsys Inc early next year. The transaction involves $27 per every common stock of Responsys which signifies 38.3 percent premium going by the Dec. 19 closing. So far in the year, ORCL has made strategic acquisitions to boost its position in the cloud-based software sector.

At the beginning of this year, Oracle Corporation (NYSE:ORCL) acquired Eloqua which significantly bolstered its cloud-based enterprise solutions. The price that the company is now paying for Responsys, substantially exceeds what is offered for the acquisition of Taleo in 2012 and RightNow in 2011. So, basically, it means that there is a strategic value in buying Responsys.

Benefits

Responsys offers e-mail, mobile and social marketing solutions to enterprises. The company generated about $163 million in revenue last year and this year it is expected to generate revenue in the range of $200 million. In this position, it stands to benefit the enterprise marketing wing of Oracle Corporation, while also adding immediate boost to the company’s revenue and profit figures.

Responsys boasts a strong clientele base that exceeds 450 enterprise clients. The company serves big names such as United Healthcare, LinkedIn Corp (NYSE:LNKD), Nordstrom, Southwest Airlines and Lego.

With spending in cloud-based marketing software poised to increase, things can only get better for Oracle Corporation (NYSE:ORCL) with its acquisition of Responsys.

Competition

Oracle Corporation (NYSE:ORCL) is a late entrant in the cloud computing field. It thus needs strategic acquisitions to boost its market share, revenue and profits. Through the recent acquisition, the company was able to post better than expected Q2.14, and this can only be justified that similar acquisitions will boost its growth and earnings.

Oracle Corporation (NYSE:ORCL) needs to wrestle for the market control against Salesforce.com Inc (NYSE:CRM) and Adobe Systems Inc (NASDAQ:ADBE). All these competitions have been in acquisition spree over the past 12 months.

Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email ([email protected]) or his Google+ page (https://plus.google.com/103338576216002376250).

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