Acme Packet Becomes Part of Oracle Communications Portfolio
In a $2.1 billion deal, Oracle is set to purchase IP networking and session border control company Acme Packet.
Acme Packet is based in Bedford, Massachusetts, and over 1,900 enterprise and service provider customers utilize the company's products. According to Oracle, Acme Packet will become a key provision in the Oracle Communications portfolio.
The president of Oracle, Mark Hurd, stated: “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 has been making many purchases recently, and the acquisition of Acme Packet is the company's largest deal since last year when it obtained Taleo, a talent management application provider.
According to Infonetics, by November 2012, Acme Packet (which was founded in 2000) had a 40 percent share of the market of carrier-grade SBCs. Acme Packet was No. 1 in market share for enterprise SBCs last year, until succeeded by Cisco in the third quarter. By 2016, it is estimated that enterprise SBCs will be a $430 million market.
The acquisition means that Oracle will now be in more direct competition with the SBC market rivals of Acme Packet; this includes Cisco, Huawei and every company in between. A variety of OEM and strategic alliance partners are utilized by Acme Packet to market its SBC wares, and also has over 330 reseller partners.
Lately, Acme Packet has been struggling somewhat, and yesterday the company announced that during the fourth fiscal quarter, it had a loss of $2 million. This contrasts with last year when the company made a profit of $8.7 million. In the fourth quarter, revenue climbed to $70.7 million, which is a decrease from $83 million that Acme Packet made in the same period a year ago. However, it did increase in the third fiscal quarter from $65.3 million.
The Oracle transaction is supported by the board of directors at Acme Packet. It is presumed that the deal will settle to around $29.25 per share of Acme Packet stock; this is a 22 percent premium compared to its close on Nasdaq at the end of last week. Relative to net of cash, Acme Packet has a total enterprise value of $1.7 billion.
On April 24-26 this year, Acme Packet will host its annual Interconnect User Conference. (CY) Link