Oracle is buying Australian construction software developer Aconex for $1.2 billion in another move to expand its cloud-based software offerings as it diversifies beyond its legacy licensing business.
Aconex’s software is used by infrastructure and building project managers, providing management of data, documents, and costs across all stages of a construction project life cycle. It will become part of Oracle’s construction and engineering global business unit, which already offers the Primavera construction management software program.
Oracle said it had agreed to acquire Aconex for about $5.97 per share in cash, representing a 47% premium over Friday’s closing price of about $4.05.
“Delivering projects on time and on budget are the highest strategic imperatives for any construction and engineering organization,” Mike Sicilia, senior vice president of Oracle’s construction unit, said in a news release.
“With the addition of Aconex, we significantly advance our vision of offering the most comprehensive cloud-based project management solution for this $14 trillion industry,” he added.
As the San Jose Mercury News reports, “Oracle has been looking to refashion its business around internet-based products.” Co-CEO Safra Catz has predicted cloud revenue will exceed software license revenue next fiscal year but in the most recent quarter, cloud-computing sales missed analysts’ estimates.
The Aconex deal is Oracle’s second acquisition of a cloud-based construction software maker, following the purchase of contract and payment management platform Textura for $663 million last year. “Oracle has been turning to acquisitions to accelerate its shift to the cloud, including last year’s $9 billion purchase of NetSuite,” the Mercruy News noted.
Aconex has more than 70,000 customers and its cloud-based software has been used on 16,000 projects across construction, infrastructure, and energy in 70 countries, according to its website. Baillieu Holst Ltd. analyst Luke Macnab said it should be a good fit with Oracle because of its strong niche offering and Oracle’s global footprint.
“Aconex were looking to grow globally over the next five to ten years or so,” he said. “This enables them to get global scale pretty much instantly.”