Skip to main content

The Globe and Mail

Oracle to buy network gear maker Acme Packet for $2.1-billion

Oracle chief executive officer Larry Ellison, who has used acquisitions to boost the company’s revenue dramatically over the past decade, had said in October that he would not rule out a big deal “down the road.”

ROBERT GALBRAITH/REUTERS

Oracle Corp. will buy network equipment maker Acme Packet Inc. for $2.1-billion (U.S.), putting it in a better position to compete with Cisco Systems Inc. in moving data securely over Internet networks.

The deal is Oracle's biggest since it bought Sun Microsystems in 2010 for about $7-billion. The company bought nearly a dozen companies in 2012, including Eloqua Inc. for $810-million in December.

Telecom carriers have been dumping wireline and other legacy services as people increasingly use a newer breed of devices to access Internet and businesses shift to IP (Internet protocol) networks, an area where Acme Packet specializes.

Story continues below advertisement

"Users are increasingly connected and expect to communicate any time and anywhere using their application, device, and network of choice," Oracle said in a statement.

Oracle chief executive officer Larry Ellison, who has used acquisitions to boost the company's revenue dramatically over the past decade, had said in October that he would not rule out a big deal "down the road."

"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 [Monday's] deal supports this notion," said Brian White, an analyst at Topeka Capital Markets.

The offer represents a 22-per-cent premium to Acme Packet's Friday close on the Nasdaq. The deal, which Acme said is expected to close in the first half of 2013, is worth about $1.7-billion, net of cash.

Acme has been hit by weak telecom spending in the past few quarters as carriers spend less on new projects and delay existing ones. Its shares had fallen 18 per cent in the last year as of Friday.

Acme also reported fourth-quarter earnings of 9 cents per share, excluding items, on revenue of $70.7-million.

Analysts expected an adjusted profit of 8 cents per share and revenue of $68.9-million, according to Thomson Reuters I/B/E/S.

Story continues below advertisement

Report an error
Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.