Apps & Software

Why Oracle Wants Agile Software (ORCL, AGIL)

Larry Ellison Inc., I mean Oracle Corp. (ORCL-NASDAQ), is paying $495 million to acquire a small niche software player Agile Software (AGIL-NASDAQ).  The buyout price is $8.10 per share and that will make most holders that purchased the shares over the last 2 years whole. 

Ellison isn’t buying the company at any great valuation or any big discount (even though not a huge price premium either) because the company is only forecast to make $0.08 EPS on revenues of $145 million in fiscal April-2008.  Agile brings some pre-packaged tier-1 clients and tier-2, but it has maintenance renewal contracts and lets Oracle more easily compete that much more with SAP, Microsoft (MSFT-NASDAQ), and IBM (IBM-NYSE) on the product lifecycle management software.

When you back out all the liabilities, there is still a net tangible value in the vicinity of $165 million, so net net this is arguably only a $330 million purchase price.  This also swings Oracle more into many tier-1 customers: Saturn (auto). Heinz, Dell, Playtex, Hitachi, Qualcomm, Lucent, Siemens, Tyco, and more.

Jon C. Ogg
May 16, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.

Get Ready To Retire (Sponsored)

Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.

Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.

Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future

Get started right here.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.