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October 24, 2011

MW Tracker Spotlight

Oracle Corporation (NasdaqGS: ORCL) to acquire Rightnow Technologies Inc. (NasdaqGS: RNOW)


Financial Overview:


Transaction Value: $1.43 Billion                   Transaction Structure: Cash

EV/Revenue: 6.5X                                       EV/EBITDA: 63.4X


MW Highlights

  • Rightnow Technologies, which provides cloud-based customer experience software products and services, allows Oracle to boost its public cloud as well as make a direct move against's CRM model.
  • Oracle plans to use Rightnow's CRM applications in its Siebel marketing software, ACG commerce, helping to round out the offering as well as provide more products for Oracle partners to sell.
  • Oracle offered a nearly 20% share price premium for Rightnow, generally in line with its previous acquisitions of large, publicly traded companies:
    • Siebel: nearly 17%, Hyperion: 21%, BEA Systems: 24%
    • PeopleSoft is an exception in which Oracle paid a 75% premium after a drawn out takeover battle.
  • In terms of multiples, the Rightnow acquisition represented substantially higher multiples than for the same set of previous deals based upon EV/Revenue and EV/EBITDA respectively:
    • PeopleSoft at 3.2X and 23.0X in 2005;
    • Siebel at 2.5X and 19.1X in 2006;
    • Hyperion at 3.4X and 20.4X in 2007; and
    • BEA Systems at 4.8X and 27.9X in 2008.
  • Oracle has been extremely acquisitive in order to secure a leading competitive position with the cloud players such as Oracle has announced eight acquisitions including Datanomic, FatWire, InQuira, Ksplice and Pillar Data Systems this year alone. Based on Oracle's previous record, they will acquire and roll out more cloud capabilities in the next year or two.
  • The CRM market remains fragmented and is predicted to be a high growth area for corporate spending, leading to more M&A activity, particularly as the more traditional software players move to the cloud in order to compete with 

Press Release:

Please click here to read the press release.  


Martin Wolf  was not a financial advisor in this transaction. To learn more about this transaction or our firm, contact Yousif Abudra at  or (925) 215-2760.   

About Martin Wolf  


Based in Silicon Valley, Martin Wolf is a leading middle market M&A Advisory focused on companies with services-based business models. Since 1997, our team has completed more than 100 transactions in six countries. We are a five-year member of the Merrill Lynch PS Referral Network, and were selected as ICICI Bank's (India's leading private bank) exclusive strategic partner for acquiring U.S. IT companies. For more information, visit


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Yousif Abudra
Yousif Abudra
Our Senior Analyst who specializes in business performance and industry assessments.