June 23, 2014, 12:20 PM

Oracle agrees to buy Micros Systems for about $5 billion

The move strengthens Oracle’s position in e-commerce and cross-channel retail, as Micros provides payments systems for many merchants, hotels and restaurants.

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Oracle Corp., a provider of e-commerce and other types of software to more than 200 retailers in the Internet Retailer Top 1000, has agreed to pay about $5 billion for Micros Systems Inc. Micros, a provider of store point-of-sale as well as e-commerce technology, has 29 clients listed among the Top 1000 retailers, plus a strong presence in the hospitality and restaurant industries.

Oracle will pay $68 in cash per Micros share, which amounts to about $5.3 billion, the companies said today.

By bringing Oracle a strong roster of hotel and restaurant clients, as well as dozens of clients among the Internet Retailer Top 500, the acquisition goes along with Oracle’s strategy of building up its expertise in vertical industries, industry analysts say. In addition to retail, hospitality and restaurants, Oracle has also expressed interest in winning business in the financial services and telecom industries, according to a report issued on the acquisition today by investment bank Cantor Fitzgerald & Co.

“We anticipate delivering compelling advantages to companies within the hospitality and retail industries with the acquisition of Micros,” Oracle President Mark Hurd says.

In addition, Oracle is likely to extend its expertise in Internet-based, or cloud-based, software services to Micros, Cantor Fitzgerald says. Micros’ forte is in-store POS systems, though it also provides technology for multichannel retailing—an area in which it expanded its offerings last year.

The acquisition will help Oracle differentiate itself from one of its major competitors, IBM Corp., by taking ownership of a company with widely used store point-of-sale technology, says Nikki Baird, managing partner of research and advisory firm RSR Research LLC. “It’s an interesting contrast of strategies: IBM spinning off its point-of-sale business to Toshiba, while Oracle doubles down with Micros,” she says. IBM sold its Retail Store Solutions POS technology in 2012 to Japan-based Toshiba TEC Corp., though the two companies still integrate their POS and e-commerce technology.

Oracle will also bring technology and financial resources to help Micros build out its technology portfolio, Micros president and CEO Peter Altabef says. “Micros has been focused on helping the world’s leading brands in our target markets since we were founded in 1977, including running more than 330,000 sites across 180 countries today,” he says. “In combination with Oracle, we expect to help accelerate our customers’ ability to innovate and differentiate their businesses by utilizing Oracle’s technologies, cloud solutions and scale.”

For Oracle, Micros will represent its largest acquisition since it bought technology company Sun Microsystems in 2010. In recent years, Oracle has acquired several companies in the Internet retail and digital marketing areas, including ATG, Endeca Technologies and Responsys. The Micros acquisition is expected to close in the second half of this year following an approval by stockholders and other closing conditions,

Micros has 26 clients listed among the Internet Retailer Top 500 and three among the Second 500. Oracle has 194 listed in the Top 500 and 18 in the Second 500.

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