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Oracle (ORCL) Taps Acme Packet (APKT) For $2.1 Bln

 February 04, 2013 09:05 AM

(By Mani) Business software maker Oracle Corp. (NASDAQ: ORCL) would buy Acme Packet, Inc. (NASDAQ: APKT) for $2.1 billion to boost its communications portfolio and services. On the news, shares of Acme Packet surged more than 20 percent in the pre-market trading, while Oracle fell 1 percent.

For each share of Acme Packet, California-based Oracle would pay $29.25 representing a 22 percent premium to Acme Packet's closing price on Friday at the Nasdaq. Excluding cash, the consideration represents an enterprise value of $1.7 billion.

Bedford, Massachusetts-based Acme Packet helps delivery of next-generation voice, video, data and unified communications services and applications across IP networks through its networking gears. The deal would give Oracle Acme's session border control technology to Oracle's communications table offering to speed the deployment of all-IP networks.

Acme Packet's session delivery network solutions are used by over 1,850 customers in more than 100 countries. The company's customers include fixed line, cable, mobile, transit and over-the-top (OTT) communication service providers, as well as enterprises, contact centers and government organizations. Acme's clientele includes AT&T, Inc. (NYSE:T) Verizon Communications, Inc. (NYSE:VZ) Microsoft Corp.'s (NASDAQ:MSFT) Skype.

Service providers, enterprises and contact centers continue to build IP-based infrastructure to lower their operating costs and introduce new IP-enabled offerings such as VoIP, video-over-IP and instant messaging (IM).

More-and-more service providers and enterprises are turning to session delivery networks, which layer complementary intelligence and controls over an IP transport network. The session delivery networks would also help them overcome the limitations inherent in using the Internet, unsecured IP network for session-based voice, video, data and unified communications,

Acme Packet's session delivery network solutions enable delivery of next-generation voice, data and unified communications (UC) services and applications across IP networks that bridge the gap between the underlying IP transport network and applications and services.

With the IP transport network providing basic packet routing and delivery services, the overlay session delivery network provides critical session border control and session management functions that ensure prioritized, secure and trusted delivery of a broad range of services and applications.

The combination of Oracle and Acme Packet is expected to accelerate the migration to all-IP networks by enabling secure and reliable communications from any device, across any network.

The deal could help service providers and enterprises delivering an end-to-end portfolio of technologies that will support the deployment, innovation and monetization of all-IP networks.

The Board of Acme Packet has unanimously approved the transaction, which is expected to close in the first half of 2013, subject to stockholder approval, certain regulatory approvals and other customary closing conditions.

Separately, Acme Packet reported a fourth-quarter net loss of $2.03 million, or 3 cents a share, compared to a profit of $8.72 million, or 12 cents a share, in the fourth quarter of 2011. Excluding items, it earned $6.5 million, or 9 cents a share, compared to $18.3 million, or 26 cents a share, last year. Wall Street expected earnings of 8 cents a share, according to analysts polled by Thomson Reuters.

Total revenue for the fourth quarter of 2012 was $70.7 million, lower than $83.0 million in the fourth quarter of 2011. Analysts expected revenue of $68.86 million.

As of Dec.31, Acme Packet has cash and cash equivalents of $55.38 million and short-term investments of $302.87 million.

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