Oracle Buys Sun For $7.4 Billion

After a recent quarterly loss of $209 million, Sun Microsystems may not look like the ideal purchase, but it was Oracle and not IBM that announced today it will be buying the home Java and Solaris for a sum total of $7.4 billion, which nets out at $5.6 billion after cash and debt.

Said Oracle president Safra Catz:

We expect this acquisition to be accretive to Oracle's earnings by at least 15 cents on a non-GAAP basis in the first full year after closing. We estimate that the acquired business will contribute over $1.5 billion to Oracle's non-GAAP operating profit in the first year, increasing to over $2 billion in the second year. This would make the Sun acquisition more profitable in per share contribution in the first year than we had planned for the acquisitions of BEA, PeopleSoft and Siebel combined.

Speculation as to the motivation behind the buyout has run toward ideas about Oracle "integrating hardware and software with Oracle's Exadata database machine," and the transaction was approved unanimously at Sun.

Safra Catz, who owns a super cool name in addition to one, now two, of the world's top tech firms, made it clear that he does not consider the purchase of Sun as much of a gamble:

"We intend to ensure that it is profitable... We believe we will be able to run Sun at substantially higher margins."

Oracle to buy Sun in $7.4 billion deal [CNet]