Tech giant Oracle (NASDAQ:ORCL) revealed plans on Monday to shell out nearly $2 billion to acquire network gear maker Acme Packet (NASDAQ:APKT) in an effort to capitalize on demand for all-IP networks.
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Based in Bedford, Mass., Acme has almost 2,000 customers in 109 countries and generated 2012 revenue of $274 million.
Oracle agreed to pay $29.25 a share for Acme, representing a 22% premium on the company’s Friday close at $23.93. The companies said the transaction is worth $1.7 billion net of cash.
By joining forces, Oracle and Acme said they plan to accelerate the push to all-IP networks “by enabling secure and reliable communications from any device, across any network.”
The companies anticipate the transaction closing in the first half of 2013, subject to Acme shareholder and regulatory approvals.
“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 healthcare, secure our homes, and much more,” Oracle President Mark Hurd said in a statement.
Shares of Acme soared 22.23% to $29.26 Monday morning, leaving them up 32% so far in 2013 but still off nearly 13% over the past 12 months. Oracle dropped 1.04% to $35.83, trimming their 2013 gain to 7.5%.
“Together with Oracle, we expect to provide customers with purpose-built, innovative solutions to accelerate the deployment of all-IP networks and help deliver a superior experience across services, devices and networks,” said Acme CEO Andy Ory.
Acme also reported fourth-quarter results on Monday, disclosing an adjusted profit of 9 cents a share on revenue of $70.7 million. Analysts had called for EPS of 8 cents on sales of $68.9 million.
For the full year, Acme logged revenue of $274.4 million, down 10.7% from 2011.