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pww.comOracle Corp. - M&A Call - NYSE:ORCL

NYSE:ORCL

Roy Lobo [Executives] 💬

Roy Lobo, the Head of Investor Relations at Oracle, made the following statements during the M&A call on January 16, 2008:

  1. Introduction:

    • Thanked the operator and greeted everyone, expressing appreciation for their attendance.
    • Introduced himself as the Head of Investor Relations.

  2. Call Participants:

    • Mentioned that Oracle's CEO, Larry Ellison, and BEA's founder, Chairman, and CEO, Alfred Chuang, were also on the call.

  3. Format of the Call:

    • Noted that there would be prepared remarks from the executives, but no questions would be taken during the call.

  4. Safe Harbor Statement:

    • Provided a Safe Harbor statement, cautioning listeners that the call might include forward-looking statements.
    • Emphasized that actual results could differ materially from these forward-looking statements.
    • Stated that Oracle is not obligated to update or revise these statements.

  5. Important Factors:

    • Indicated that throughout the discussion, important factors affecting the business would be presented.
    • Advised listeners to review the materials filed with the SEC, specifically mentioning the most recent Form 10-K and Form 10-Q for a complete discussion of risk factors.

  6. Transfer of Speaking:

    • Concluded his remarks by turning the call over to Larry Ellison for his opening comments.

Larry Ellison [Executives] 💬

During the M&A call on January 16, 2008, Larry Ellison, the CEO of Oracle Corporation, provided the following comments:

  1. Announcement of Agreement to Acquire BEA Systems:

    • Oracle agreed to purchase BEA Systems for $19.375 per share in cash.
    • The total value of the offer is approximately $8.5 billion, or $7.2 billion net of BEA’s cash on hand of $1.3 billion.
    • Oracle anticipates the transaction will be accretive to earnings by between $0.01 and $0.02 per share over the first full year after closing.

  2. Financial Details and Expected Benefits:

    • Oracle plans to finance the purchase using a combination of cash on hand and readily available short-term credit.
    • Oracle generated more than $5.5 billion in free cash flow last year and had $8.4 billion in cash and marketable securities at the end of the last quarter.
    • Regulatory approvals are required, but Oracle expects the deal to close by mid-October 2008.

  3. Strategic Importance and Vision:

    • The acquisition is a significant step towards Oracle's vision of becoming a strategic enterprise software provider with industry-leading products and world-class technology solutions across the software stack and various industries.
    • Oracle believes its open-standards-based technology stack will offer greater value to customers compared to alternatives from Microsoft, IBM, SAP, Sun, and open-source vendors.

  4. Product Synergies:

    • Oracle and BEA share a vision of highly scalable, adaptable, standard-based products centered around the Java programming language.
    • BEA's product lines and vertical solutions are complementary to Oracle's Fusion middleware products.
    • Oracle will become the leader in messaging and transaction processing platforms and in middleware solutions for the telecommunications vertical.

  5. Market Positioning:

    • The acquisition strengthens Oracle's position in the middleware market, enabling increased innovation and market acceleration.
    • It accelerates the adoption of Java-based middleware as an alternative to Microsoft's .NET architecture and accelerates the adoption of Service-Oriented Architecture (SOA).

  6. Customer and Partner Benefits:

    • The combined offerings of Oracle and BEA will create a comprehensive and complementary product footprint in middleware.
    • Most of BEA's customers are already Oracle customers and run mission-critical software from both companies.
    • Customers will benefit from a single strategic supplier offering products built around open standards, ensuring continued customer choice and flexibility.

  7. Support for BEA Products:

    • Oracle plans to aggressively support BEA’s products, similar to its approach with other recent acquisitions.
    • Oracle Fusion middleware will remain central to Oracle's middleware strategy, and BEA technologies like WebLogic will be integrated into Oracle's offerings.

  8. Employee Integration:

    • The acquisition adds the strength of BEA’s employees to Oracle’s workforce, creating a third major standalone sales force within Oracle Corporation.

  9. Closing Remarks:

    • Larry thanked Alfred Chuang and expressed excitement about the deal, emphasizing the strategic fit and benefits for customers, partners, and shareholders.

    • He provided details on how to access the replay of the call and concluded the session.

Alfred Chuang [Executives] 💬

During the M&A call on January 16, 2008, Alfred Chuang, the founder, Chairman, and CEO of BEA, made the following statements:

  1. Introduction and Acknowledgment:

    • Alfred thanked Larry Ellison and expressed gratitude to everyone for joining the call on such short notice.

  2. Maximizing Shareholder Value:

    • He explained that for several months, BEA's board of directors, with the assistance of financial advisors, had been exploring ways to maximize shareholder value.
    • This included discussions with third parties about the potential sale of the company.
    • The agreement with Oracle was the culmination of this process, and Alfred expressed satisfaction with the outcome.

  3. Agreement with Oracle:

    • Alfred noted that the all-cash transaction represented a substantial premium over BEA's closing stock price prior to the announcement and a significant premium over the stock price before Oracle's initial offer in October.
    • He emphasized that the board and he himself unanimously agreed that this transaction was the best way to maximize value for all shareholders.

  4. Customer Benefits:

    • Alfred highlighted that customers would benefit from the combined forces of BEA and Oracle, creating an innovative global leader in enterprise software.

  5. Strategic Fit:

    • He described the natural strategic fit between the two companies, bringing together Oracle's strengths in databases and applications with BEA's leadership in middleware.
    • Alfred expressed pride in BEA's accomplishments over the previous 13 years and expected that BEA's innovative technologies, research and development talents, and leadership in the high-pro region of Asia Pacific and other regions would contribute significantly to the combined company.

  6. Integration Plan:

    • Alfred mentioned that as they worked towards the closure of the transaction, they would coordinate with Larry and his team to develop a comprehensive integration plan to ensure a seamless transition for the organization, particularly for customers.
    • He stressed the importance of a quick and smooth integration for the success of the transaction.

  7. Continued Operations:

    • Alfred assured that until the transaction was completed, BEA would operate independently, and it would be business as usual.
    • He confirmed that customers would continue to receive the highest quality service and that Oracle intended to preserve their investments in BEA's products and support them similarly to other recent Oracle acquisitions.

  8. Future Communications:

    • Alfred looked forward to speaking with stakeholders again in February for BEA's first-quarter earnings results and full-year results.

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