The deal is worth $13.50 a share in cash, which is a 27% premium on Stellent’s closing price on Nasdaq yesterday. The transaction is expected to close at the end of this year or in early 2007.
Stellent’s develops so-called enterprise content management software that is used by companies to manage documents, email, Web content, digital assets, images, records and other unstructured information. The software manages the entire content lifecycle of this type of information from creation, capture, storage, management, publish, access and search and archive.
The acquisition will certainly boost Oracle’s credibility in an ECM market that is consolidating rapidly. Storage giant EMC Corp started the ball rolling with its $1.7bn acquisition of Documentum Inc in 2003. More recently Open Text Corp outbid private holding firm Symphony Technology Group this summer to take control of rival Hummingbird Ltd for $465m. And just last month IBM wrapped up its $1.6bn acquisition of FileNet Corp.
Oracle was clearly wary of running out of acquisition targets to bolster its own ECM prowess. The company has recently hinted at broadening its data management capabilities beyond structured relational data.
The company said in a statement yesterday that that Stellent’s Universal Content Management suite will complement and extend its existing content management portfolio that is branded as Oracle Content Database.
So far Oracle has really only addressed the storage infrastructure aspect of content management — Oracle’s Content Database basically enables companies to store and centrally manage unstructured content in Oracle databases.
But with Stellent’s technology under its wing Oracle will now be able to offer richer and broader ECM functionality and process management capabilities around retention, corporate governance, risk and compliance.
The amount of electronic content, unstructured data, and documents is growing very rapidly, said Oracle Senior Vice President Thomas Kurian in a statement yesterday.Organizations are seeking advanced and automated content and process management solutions to manage this information to meet regulatory requirements.
Oracle plans to announce a new content management strategy in a special media conference call on November 13.
Stellent, which is based in Eden Prairie, Minnesota has been under pressure from larger ECM player and was widely tipped as an acquisition target following the recent spate of consolidations.
A statement from Stellent’s CEO Robert Olson yesterday seemed to reflect that sentiment by calling the merger a positive milestone for all our stakeholders.
Olson added that Stellent would now also benefit from dedicated resources and broad distribution networks of the largest enterprise software company in the world and allow it to compete on a more equal footing against its larger ECM rivals.
News of the takeover came on the same day that Stellent posted a weaker than expected profit of $1.3m for its second quarter against revenue that rose 12% to $33.7m.Stellent has over 4,700 customers worldwide including Merrill Lynch, Proctor & Gamble and Vodafone.
There seems to be no let up in Oracle’s buying spree. Since early 2005 the Redwood Shores, California-based firm has spent around $20bn acquiring 25 software companies including business applications rivals PeopleSoft Inc and Siebel systems Inc.
Stellent is the second Minneapolis-based firm that Oracle has bought. Last year it beat off arch-rival SAP AG to get its hands on another Twin Cities software firm Retek Corp, which makes retail applications software, for $631m.
Shares of Stellent shot up over 25% to $13.33 in extended trading yesterday. The stock had earlier closed 5% down in the regular Nasdaq session.
Meanwhile Oracle’s shares slipped by 1% to $18.27 at yesterday’s close.
