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Oracle's $495M 'Agile' Move

Oracle  dove headfirst into the product lifecycle management (PLM) market by agreeing to acquire Agile Software  for $495 million in cash.

Agile is a leader in the market for PLM software, which helps supply-chain professionals and business executives navigate products from innovation through production, sales and service.

Managers use the software to share product specifications and configurations across the supply chain in high-tech, life sciences and manufacturing markets. Businesses find such control software useful in helping them meet regulatory requirements.

Cowen and Company analyst Peter Goldmacher said in a research note that Agile will help Oracle fill a gap in its manufacturing applications suite, and noted that Oracle's existing PLM assets lack the breadth and depth of Agile's software.

Goldmacher also noted Agile is working on a software-as-a-service PLM offering, which would help the software maker appeal to more Web-centric customers.

Oracle, hoping to close the deal in mid-to-late July, will also seek to leverage Agile's 1,250-plus customers, which include Acer, GE Medical Systems, Lockheed Martin, McDonald's and Shell.

Agile is the third-largest PLM provider to be targeted for acquisition. Earlier this month, Siemens AG purchased UGS Corp. for $3.5 billion. Dassault Systemes SA last year picked up MatrixOne. for $408 million.

IBM and pure-play Arena Solutions are also in the PLM mix with products.

With PLM picking up and Oracle looking to fortify its application position versus foe SAP, the buy is a no-brainer.

"Profitable product innovation is critical to product-based industries, making PLM one of the fastest-growing application segments," Oracle President Charles Phillips said in a statement.

Oracle offered $8.10 per share for Agile, representing a 14 percent premium based on Agile's Monday close of $7.08. Oracle is no stranger to paying premiums for public companies that will give it a market leadership position.

The software maker paid premiums of 21 percent for business intelligence provider Hyperion Software Solutions and 10 percent for application power Siebel Systems.

Goldmacher was bullish about Oracle's business shopping spree, noting that it will "drive margin expansion" for the company.



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