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June 23, 2014
martinwolf Transaction Analysis

Oracle Acquires Micros Systems

 

Financial Overview

  • Transaction Size:                                                   $5.3 billion
  • Implied Enterprise Value:                                      $4.6 billion
  • EV/LTM Revenue:                                                              3.5x
  • EV/LTM EBITDA:                                                              17.6x

Transaction Facts

  • Oracle (NYSE:ORCL) announced today that it was acquiring retail and hospitality solutions and software provider Micros Systems (NASDAQ:MCRS) for $5.3 billion, or $68 per share, approximately 18% above where Micros Systems' shares were trading before rumors of the deal broke out last week.
  • Oracle has announced 11 acquisitions in the last 16 months, but this transaction is its largest by far since it acquired Sun Microsystems for approximately $7.4 billion in 2009.
  • The transaction has been positively received by investors in both companies -Micros shares were up 3.4%, closing at $67.98 per share, while Oracle shares were up 0.7%, closing at $41.10 per share.

Expanding Market Presence With New Verticals

  • Solidifying Presence in Growing Vertical: Founded in 1977, Micros Systems is deeply entrenched in three major markets: food and beverage, hotel and retail. Its domain penetration helps Oracle shore up capabilities to compete with IBM's DemandTec and position Oracle to take advantage of future technological expansion in the space. 
  • All-in-One: With Micros Systems, Oracle is acquiring a vertically focused solution provider with hardware, software and services capabilities used in 330,000 sites in 180 countries. Micros Systems is deeply entrenched in three major markets: food and beverage, hotel and retail. Its domain penetration helps Oracle shore up capabilities to compete with IBM's DemandTec and position Oracle to take advantage of future technological expansion in the space. 
  • A Shot in the Arm: Oracle last week reported a 4% year-over-year drop in profit, paired with a low 3.4% revenue increase. This deal is expected to be immediately accretive to Oracle's earnings.

For more information, view the press release by clicking here.

 

martinwolf was not the advisor in this transaction.

 

About martinwolf    

 

                
                Walnut Creek, CA                                                Bangalore, India

With offices in the San Francisco Bay Area and Bangalore, India, martinwolf is a leading middle market M&A Advisory focused on companies with services-based business models. Since 1997, our team has completed approximately 125 transactions in ten countries. We are a five-year member of the Merrill Lynch PS Referral Network, and are partnered with the Enterprise Advisory Department of CICC (a leading bank in China) and BMR Advisors, a leading professional services organization in India. 

 

The firm is also a presenting sponsor of the Global IT M&A Forum.   

 

martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com.  

 

To learn more about martinwolf, contact Matthew Putzulu at mputzulu@martinwolf.com.

 

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