Oracle’s (NYSE:ORCL) announcement on Monday that it’s buying medical software vendor Cerner for $28.3 billion is monumental for a company that was once viewed as the software industry’s great consolidator.
On 15 occasions since 2005, Oracle has shelled out at least $1 billion for an acquisition. Seven of those topped $5 billion. In 2009, Oracle agreed to pay $7.4 billion for Sun Microsystems, opening its wallet for servers and storage networks to go beyond software and become what Ellison called an “integrated system” company.
But only once, prior to this week, has head honcho Larry Ellison ever spearheaded a deal of at least $10 billion. That came in 2004, when Oracle bought PeopleSoft for $10.3 billion after a hostile battle that lasted 18 months.
In agreeing to buy Cerner for almost three times the price of PeopleSoft, Oracle is jumping into the modern era of M&A, one that in recent years seemed to pass Ellison by. Rivals have used their expanding market cap and swelling cash piles to buy growth or to get into a market that can keep them relevant as the world goes cloud, mobile, and driven by data.
It’s the first mega-deal for Oracle since the $9.3-billion purchase of cloud business management software vendor NetSuite in 2016. Ellison, Oracle’s chairman, was NetSuite’s biggest shareholder, with ownership of roughly 40% of the company at the time of the deal.
ORCL shares began Tuesday down 52 cents to $91.12.
