Technology giant Oracle Corp has just announced it will buy Art Technology Group for $1 billion, 46% more than its current market value, in a courageous move to improve its standing in the world of e-commerce.
ATG's back-end technology powers some of the biggest names in online payment services, including BestBuy.com and AT&T. It could be considered a growth company because it isn't the biggest player in e-commerce, but it is strong enough with room to advance.
Backed by Oracle's significant amount of resources, it will most definitely pump up the competition for online retailers and payment providers.
According to a Reuters report on the acquisition, ATG brought in $50.3 million in sales over the most recent quarter, on an annual pace of around $200 million. So to purchase the company for $1 billion doesn't seem too insane.
And although the closing price of ATG last night was a $4.10 per share, before the deal was announced this morning, the price was already on its way up. No doubt fueled by early leaks of the acquisition, ATG shot up to $5.99 per share this morning. Oracle's offer was to buy the company at $6 per share.
Avian Securities analyst Jeff Gaggin called the move "a nice, safe acquisition for Oracle" in a comment to Reuters.
This is Oracle's second payment services acquisition in a row. The company's last corporate buyou was with eServGlobal Limited, a small retail payment solutions firm.
It is Oracle's ninth major acquisition this year, with other deals including the purchase of Convergin, Silver Creek, and Sun Microsystems.
The ATG acquisition is expected to be complete by early next year.