The Village View

Thursday, June 01, 2006

Oracle acquisition update

UPDATE: Seems I may oversimplified things regarding return to investors of the Demantra acquisition. Obviously, investing in different rounds and at different terms may lead to differing returns. I found this breakdown of returns this morning:
Advent invested $15 million and will receive $24 million, while Formula Ventures invested $6 million and will receive $9 million. The remaining $17 million will be divided among the other investors and the the company’s management and employees.

Oracle Buys Demantra

The transaction is expected to close in June 2006. Speculation about the impending deal emerged Wednesday, with observers anticipating an acquisition price of about $41 million ...

Demantra's product, Spectrum Suite, helps customers do retail planning, inventory replenishment for stores, and real-time sales and operations planning. It's one more in a series of Oracle retail-related acquisitions, including 360Commerce, Temposoft, ProfitLogic and, of course, Retek.

According to Red Herring, the acquisition price was approximately $41M, which means Demantra's investors couldn't have been to excited as they invested $42M over 10 years. Not the first company in the news recently to be sold for less then the total of its funding.

Lastly, SAP may feel some impact of this acquisition as Demantra is part of the Powered by NetWeaver partnership program. It's unclear if SAP will lose Demantra as a partner. Demantra's VP of Marketing, for one, indicated there were no plans to end the association.

Portal pushing shareholders to accept Oracle bid
Oracle Corp.'s bid to acquire billing and revenue management software vendor Portal Software Inc. is still not a done deal. To encourage its shareholders to accept Oracle's offer, Portal issued a slide presentation Wednesday laying out more details of why the company's board decided to sell to the database and applications vendor.

A slide presentation, huh? Well that pretty much oughta take care of anybody still sitting on the fence. Wonder why I've never thought of something that innovative.

I wrote a post earlier about this deal (and pointed out that we had been expecting it). Seems Portal had to extend the deadline to tender shares from May 22nd to June 6. Seems that initially fewer then 25% of Portal's public shareholders (excluding board members and management) had tendered shares. Seems some folks weren't happy "with both the price and structure."

In the slide presentation, which is on the SEC's Web site, Portal lists as factors in its decision to go with Oracle its financial woes...

Financial woes you say? Jeez, they lost $75M (net income) on revenues of $105M for the 12 months ending in Jan of 05 (that's the most recent I could find; they were delisted from NASDAQ and are deliquent in their filings). Does anybody else think that maybe if you're a shareholder you should take Larry's $220M and call it a day?

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