Oracle, Not Done Yet, To Buy Hyperion For $3.3B


Says the deal strengthens its position vs. SAP.


In a bid to further bolster its analytics capability, Oracle said it is buying Hyperion Solutions for $52.00 per share or $3.3 billion in cash. The deal is expected to close in April.

In a statement sent out early Thursday morning, Oracle CEO Larry Ellison said the acquisition "makes Oracle the category leader in the high growth enterprise performance management market."

Oracle is positioning the purchase as yet another lever against SAP, the enterprise applications leader.
"Thousands of SAP customers rely on Hyperion as their financial consolidation, analysis and reporting system of record," said Oracle President Charles Phillips in the statement. "Oracle already has PeopleSoft HR, Siebel CRM, G-Log, Demantra, i-flex, Oracle Retail, and Oracle Fusion Middleware installed at SAP's largest ERP customers. Now Oracle's Hyperion software will be the lens through which SAP's most important customers view and analyze their underlying SAP ERP data."

In some ways the move seems inevitable. Large software vendors, including Oracle, SAP and Microsoft, are all adding analytics to their core products and there has been much speculation that stand-alone BI/analytics players like Hyperion, Cognos, Business Objects, are therefore ripe for acquisition.

And, as has been amply documented, Oracle has been spending billions beefing up both its applications lineup and other key capabilities, buying not only Siebel Systems and PeopleSoft but Oblix for its identity management, Retek for its retail expertise.

"We expect this transaction to be accretive to Oracle's earnings on a non-GAAP basis by at least one cent per share in fiscal year 2008 and by at least four cents per share in fiscal 2009," said Oracle President and CFO, Safra Catz in a statement.

"Given the size of our global organization and the complementary nature of our businesses, we should recognize substantial revenue synergies and significant economies of scale."

Dana Gardner, principle analyst with Interarbor Solutions, Gilford, N.H. said the deal makes sense.

"This is a good fit. The new greater value for data is in what it can do for you, not that you can access it fast. As the value abstraction moves higher, coupling BI with performance management -- and other business-oriented services -- will increase into an inter-related suite approach," he noted.

"Oracle and Hyperion need to provide such a suite benefit, hence the strong fit together. This also augment's Oracle's move to heterogeneity and best-of-breed over proprietary-stack strategy. The merger also places Oracle -- once again -- on a better footing against IBM via acquisition. And this also follows HP's recent ramp-up to BI."