February 4, 2013
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Acme Packet (NASDAQ: APKT ) soared 22% today after enterprise software gorilla Oracle (NASDAQ: ORCL ) agreed to acquire the network gear company for about $2.1 billion.
So what: The all-cash deal values Acme at $29.25 per share and represents a 22% premium to its closing price on Friday. Oracle is making the move to boost its communications offering, triggering speculation that other IP networking companies like BroadSoft (NASDAQ: BSFT ) and Sonus Networks (NASDAQ: SONS ) -- up 10% and 15%, respectively, today -- could also be ripe for a takeover.
Now what: The transaction is expected to close in the first half of 2013, subject to Acme shareholder and regulatory approval. "The communications industry is undergoing a dramatic shift as users become more connected and dependent on mobile applications and devices," said Oracle senior VP and general manager Bhaskar Gorti. "This combination will enable secure and reliable delivery of real-time interactive communications through the most comprehensive, best-in-class communications portfolio in the industry." So while Acme Packet's upside is likely limited at this point, Oracle's newly bolstered communications solution should help in delivering solid returns over the long term.
Interested in more info Acme Packet? Add it to your watchlist. How about Oracle? Add it to your watchlist.
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