The $1.19bn deal was announced by Oracle and Aconex today. Oracle will pay the amount in cash, valuing Aconex shares at around A$7.80 each. The acquisition will be completed during the first half of 2018 after it undergoes formal approval by Aconex shareholders.
In a letter published today, Aconex co-founder and CEO Leigh Jasper said the sale will open new opportunities for the company. Aconex will merge into Oracle’s Construction and Engineering unit. It will continue to provide cloud services to construction companies, offering centralised co-working, collaboration and project management applications.
“Together, Aconex and Oracle will provide the world’s most comprehensive cloud offering for managing all aspects of construction projects,” wrote Jasper. “The combination will enable us to bring end-to-end, digital, cloud based solutions to our customers around the world to help them effectively plan, build and operate large-scale projects.”
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The construction industry is now experiencing rapid digital transformation as legacy technologies are replaced with agile modern alternatives. The possibilities presented by next-generation networks, cloud services and IoT could help construction firms to improve efficiency and collect more data as projects progress. Aconex has been selling information systems to the industry since it was founded in 2000.
In recent years, the company has experienced massive fluctuations in its share price. After listing in Australia in 2014, the company has risen from A$1.90 to a peak of A$8.50 last year. CNBC reports Aconex’s share price spiked again today, climbing 45 percent as trading opened. It’s now close to hitting the A$7.80 per-share price offered by Oracle.
The acquisition will significantly bolster Oracle’s cloud business as it seeks to expand its portfolio. The announcement comes a week after Oracle filed disappointing financial results after its second-quarter earnings report.
The company’s still struggling to move away from its legacy database products towards new cloud-based architectures. The purchase of another well-established cloud provider will help Oracle grow its presence in the industry, staving off the unease of financial analysts.
