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Oracle Offers $3.3B for BI Power Hyperion

Oracle today agreed to buy Hyperion Solutions for $52 a share in cash. The $3.3 billion deal will make Oracle a leader in the lucrative business intelligence (BI) software space.

The deal, a 21 percent premium over Wednesday's closing price of Hyperion's shares of $42.84, will thrust Oracle deeper into competition with long-time BI market leaders Business Objects  and Cognos and MicroStrategy .

Hyperion, which has more than 12,000 customers worldwide, including 91 Fortune 100 companies, sells analytic applications that aggregate data from corporate accounting systems for financial reporting. Such software is crucial in helping CFOs keep in step with federal compliance regulations.

Hyperion also offers planning and budgeting applications, which financial executives use to run businesses every day.

The acquisition, which Oracle expects to close in April, will also give the software giant more leverage against SAP , the German applications giant Oracle has been targeting as its chief foe since it began snapping up applications vendors with a vengeance four years ago.

Oracle President Charles Phillips said on a conference call that thousands of SAP customers close their books and manage their charter accounts and organization structure using Hyperion's software.

"The acquisition of Hyperion is a strategically important acquisition -- the continuation of a very successful plan to create the most comprehensive and open enterprise software stack in the industry," Phillips said on a conference call today.

"With Hyperion, we will be adding a leading enterprise planning system, a high-growth, leading financial consolidation solution, a powerful OLAP engine... and a global sales organization with over 1,900 sales and consulting professionals dedicated to business intelligence."

Ventana Research CEO Mark Smith said Hyperion thinks the key to the deal is its strength in finance applications.

"Oracle did not have a good footing in the office of finance, and this is the bulk of rationale behind it, but obviously some additional BI depth does not hurt," Smith told internetnews.com.

BI software, which IDC and Gartner estimate is a multi-billion-dollar market, enables corporations to gain more insight into the way their employees and business processes are performing.

Oracle already sells a complete BI suite, Business Intelligence Suite Enterprise Edition 10g, but adding Hyperion will give the software giant new corporate performance management tools and a large customer base.