Oracle snaps up Agile in latest shot at SAP

After the latest all-cash purchase closes in July, Oracle will have spent more than $25 billion snapping up smaller software makers since 2004 in an audacious challenge to Germany’s SAP AG, the leading provider of business applications used to automate a wide range of administrative tasks.

San Jose-based Agile specializes in software that helps firms manage key products.

Like a long list of other Silicon Valley companies, Agile recently ran into accounting trouble because the value of some employee stock options had been misstated for years. The company absorbed $69.6 million in expenses to correct the problem, raising its combined losses to more than $140 million since April 2001.

Although it targets a relatively small market, Agile could help Oracle sell more software to hundreds of SAP customers, said AMR Research analyst Bruce Richardson. Many of the 1,250 customers who use Agile’s “product life management" software are high-tech firms that also run some of SAP’s applications.

“This is an example of another foreign body from Oracle invading SAP’s customer base," Richardson said. Oracle muscled into SAP’s turf with a just-completed $3.3 billion purchase of Hyperion Soluti-ons Corp., whose products are also used by SAP customers.

Agile’s sale price translates into $8.10 per share, a 14% premium above the company’s Tuesday closing price and above its 52-week high of $7.61. Agile shares fell 18 cents to $7.08 while Oracle shares shed 10 cents to $18.84 before the deal was announced.

Oracle emerged as a high-tech powerhouse through its leadership in database software. The recent expansion into applications software helped Oracle boost its profit by 28% to $2.67 billion through the first nine months of its current fiscal year. While Oracle has been on the takeover prowl, SAP has focused on luring away customers alienated by its rival’s expansion, while also trying to supplement its product line with smaller, “tuck-in" acquisitions of niche players.

Richardson suspects SAP considered bidding for Agile before deciding it would be better off trying to build a co-mpeting product on its own.

Milestone Alert!
Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!