Big Money For SBC: Oracle Buys Acme Packet

Bedford, Mass.-based Acme Packet's products are used by more than 1,900 enterprise and service provider customers, according to the company. They'll become a core offering in the Oracle Communications portfolio, Oracle said.

"The addition of Acme Packet to Oracle's leading communications portfolio will enable service providers and enterprises to deliver innovative solutions that will change the way we interact, conduct commerce, deliver health care, secure our homes and much more," Oracle President Mark Hurd said in a statement.

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The move is acquisition-hungry Oracle's largest deal since it nabbed talent management application provider Taleo nearly a year ago.

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Founded in 2000, Acme Packet as of November 2012 had a 40 percent share of the market for carrier-grade SBCs, according to Infonetics Research. But as of last year, it had lost the No. 1 market share for enterprise SBCs to Cisco, which overtook Acme Packet by the third quarter, according to Infonetics. Enterprise SBCs are expected be a $430 million market by 2016.

The move puts Oracle into closer competition with Acme Packet's SBC market rivals, which include everyone from Cisco and Huawei to emerging players such as Sonus Networks. Acme Packet also has a range of OEM and strategic alliance partners that market its SBC wares, not to mention more than 330 reseller partners.

Acme Packet has struggled as of late, and in a separate statement Monday, said it had swung to a $2 million loss for its fiscal fourth quarter, compared to an $8.7 million profit a year earlier. Revenue in its fourth quarter was $70.7 million, down from $83 million in the year-earlier quarter, but up from $65.3 million in fiscal third quarter.

Acme Packet's board of directors unanimously approved the Oracle transaction. The deal shakes out to about $29.25 per share of Acme Packet stock -- about a 22 percent premium from its Friday, Feb. 1 close on the Nasdaq. Net of cash, it has an enterprise value of $1.7 billion, according to Acme Packet.

Acme Packet still plans to host its annual Interconnect User Conference on April 24-26, according to a FAQ posted to Oracle's corporate website.