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Oracle Expands Retail Expertise With ProfitLogic Acquisition

The latest deal fits with industry speculation that Oracle will continue to buy smaller software vendors, particularly those in the retail space, as it tries to take market share from SAP.
Oracle on Tuesday said it plans to purchase privately held ProfitLogic Inc., a company that designs software to help retailers accurately forecast sales and make pricing decisions. The acquisition comes just months after Oracle acquired Retek Inc., another provider of software for the retail industry.

"We now have the most complete retail footprint out there," says Duncan Angrove, general manager of Oracle Retek, Oracle's retail business unit. "It would be very difficult to come across a retailer that wouldn't find a function they'd need in this combined offering."

The latest deal fits with industry speculation that Oracle will continue to buy up smaller software vendors, particularly those in the retail space, as it tries to take market share from SAP. The proposed transaction is expected to close by month's end. Oracle is expected to keep the majority of the 250 employees at Cambridge, Mass.-based ProfitLogic.

Accurate pricing is an important goal for retailers. It includes knowing when and how much to mark an item up or down based on economic factors, regional demand, and even weather forecasts.

Terms of the deal weren't disclosed, but AMR Research estimates ProfitLogic will have between $40 million and $50 million in revenue this year. Customers include Bloomingdale's, J.C. Penny Co., Nordstom Inc., and Toys R Us. Investors in ProfitLogic have included Bain Capital Partners and JP Morgan Partners.

ProfitLogic's code base is "fusion friendly," and will easily integrate with other applications, Angrove says. Both companies say they support Java 2 Enterprise Edition and open standards, which will help with integrating their products. The companies say many retailers already use products from both ProfitLogic and Oracle.

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