Oracle Corp. is nearing a deal to buy Micros Systems Inc. for more than $5 billion, people familiar with the matter said, as Chief Executive Officer Larry Ellison moves to combat slowing growth by adding software for hotels and restaurants.
Oracle and Micros are in exclusive talks, though the two sides could still fail to reach an agreement, said the people, who asked not to be identified discussing a private matter.
Ellison is looking to acquisitions to fuel expansion after 10 quarters of sluggish sales growth. Oracle was late to the market for Internet-based cloud software and is now rushing to remake itself as a provider of gear and programs to underpin its clients’ shift to Web-based computing.
Based in Columbia, Maryland, Micros sells software and services for hotels, restaurants, and retailers. Its shares rose 15 percent to $66.33 at the close in New York and earlier soared as much as 22 percent, their biggest gain since September 1996. Oracle rose less than 1 percent to $42.32.
Oracle, based in Redwood City, California, came close to acquiring Micros about six years ago, according to one person with knowledge of the matter. Micros Chairman Tom Giannopoulos, who was CEO at the time, flew from Maryland to California to sign a deal, only to have the transaction fall through at the last minute, this person said.
Dealmaking in the technology space is accelerating as established software companies try to navigate the shift to cloud computing and see off challenges from new competitors. Earlier this week SanDisk Corp. agreed to buy Fusion-io Inc., which provides storage to Facebook Inc. and Apple Inc., for about $1.1 billion.
Oracle will report its quarterly earnings on Thursday. In the previous quarter, license and cloud-subscription revenue fell short of analysts’ estimates.
The company has spent $50 billion to acquire about 100 companies in the past decade. Of those, more than 20 have been geared at specific industries, including the 2010 acquisition of clinical-trial software maker Phase Forward Inc., and purchases of retailer-software makers ProfitLogic Inc. and Retek Inc. in 2005.
“This would really be an acquisition for their retail arm and it would add another leg to their growth stool as they are more focused on their e-commerce and cloud strategy,” said Daniel Ives, an analyst at FBR Capital Markets & Co., who rates Oracle the equivalent of a buy. “They haven’t really made a big acquisition in the last few years and they need more fuel in the tank.”
The acquisition of Micros would be Oracle’s largest since the $5.7 billion takeover of Sun Microsystems Inc., announced in 2009, data compiled by Bloomberg show.