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Oracle Grabs Agile Software In $495 Million Buyout

The database company expects the deal to trump SAP by establishing its own product lifecycle management software for Oracle and Siebel customers.
Oracle extended its buying spree of software companies by snatching up Agile Software for $495 million on Tuesday. The database and enterprise software company said Agile will help it better serve its supply chain customers and compete more effectively against rival SAP AG.

The company said Agile will become the foundation for Oracle's product lifecycle management strategy. The acquisition is very strategic as both Oracle and Agile note that Agile's applications are used by many SAP and non-Oracle customers.

Agile currently serves supply chain companies in a number of verticals including high-tech, life sciences, industrial manufacturing, and consumer packaged goods. Its customers include Acer, Flextronics International, GE Medical Systems, Harris, Heinz, Johnson & Johnson, Lockheed Martin, McDonald's, Micron, Qualcomm, Shell, and ZF.

In the announcement, Agile CEO Jay Fulcher noted his company's strengths in producing PLM software, which can help a company track a product's progress from concept and design to production, sales, and service. Fulcher noted that Agile has more than "1,250 PLM customers and over 10,000 visualization customers globally."

Indeed, the number of companies licensing PLM software is expected to reach $7.3 billion in 2009, an 11% increase year over year (except for CAD and Direct Material Sourcing), according to a 2006 report by industry analyst group AMR Research. By 2009, researchers project PLM will be the third-largest segment in enterprise applications.

In an online presentation, Oracle said it expects to use Agile's software products as a hub for Oracle's enterprise resource planning and supply chain management software as well as Siebel's customer relationship management software.

Oracle also said combining Agile's products with its own should be easy since Agile programs run on Oracle's framework, 98% of Agile's customers are Oracle technology customers, and more than 40% are Oracle Applications customers. Agile also is compatible with Oracle Fusion Middleware and Fusion Application stack, which uses open XML and PDX standards, Oracle said.

Agile is considerably less expensive than many of Oracle's other historic purchases. Recently Oracle shareholders approved a $3.3 billion acquisition of Hyperion.

If approved by the shareholders of both companies, the transaction should resolve by mid to late July 2007 and will cost Oracle $8.10 per Agile share, or approximately $495 million.