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Oracle to Acquire Acme Packet (ORCL, APKT)

Oracle Corporation (NASDAQ: ORCL) announced on Monday that it has agreed to acquire Acme Packet Inc. (NASDAQ: APKT) in deal estimated at $2.1 billion.

The move is expected to allow Oracle compete with more vigor against Cisco Systems Inc. (NASDAQ: CSCO) in handling data securely through internet networks. Oracle’s spectacular revenue growth in the last decade is mainly ingrained in Company’s Chief Executive, Larry Ellison’s acquisitions- driven strategy.

Lately telecom operators have been discarding wire-line business as more and more users are opting for newer technologies and devices whilst large organizations switch to Internet Protocol (IP) networks—an area in which Acme specializes.

In a statement to analysts and investors, Oracle said, “Users are increasingly connected and expect to communicate anytime and anywhere using their application, device, and network of choice.”

For Acme, the deal could not have come at a better time. Acme was feeling the pinch on its top line and bottom line due weak telecom spending in the last few quarters as carriers were reluctant to invest new projects and postponed existing ones due to macroeconomic uncertainty. Its shares had plunged 18 percent in last one year as of last Friday.

Following the announcement, shares of Acme Packet skyrocketed while shares of Oracle slipped.

The deal is Oracle’s biggest since it acquired Sun Microsystems back in 2010 for $7 billion. Last year, Oracle bought almost a dozen companies, which included the acquisition of Eloqua Inc. for $810 million in December.

Reacting over the deal, Brian White, an analyst at Topeka Capital Markets, told Reuters, “We have been expecting Oracle to make a bigger push into the networking market as convergence across the IT world appears to be inevitable and today’s deal supports this notion.”

The offer represents a 22 percent premium over Acme Packet’s closing stock price as of Friday on the Nasdaq.

Oracle said that the deal is expected to close in the first half of fiscal 2013


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