Investopedia: Oracle Expands Its Cloud Business ... RightNow

Oracle (Nasdaq:ORCL) has always been a notably acquisitive company, so it was really only a matter of time before they announced another meaningful deal. Likewise, the company is actively trying to build it out its cloud computing and software as a service (SaaS) business, and stay ahead of the likes of SAP (NYSE:SAP) and Salesforce.com (NYSE:CRM), so a deal in the SaaS space was likewise just a matter of time.


Those two timelines met on Monday morning, as Oracle announced that it had reached an agreement to acquire customer service specialist RightNow (Nasdaq:RNOW) in an all-cash deal.

The Deal
Oracle will be paying $43 per share in cash for RightNow. That works out to about a 20% premium to RightNow's prior closing price, and a total net price tag of about $1.5 billion - not exactly a huge deal for a company with $16 billion in net cash on the balance sheet, and over $5 billion of free cash flow in the last quarter. (Free cash flow is a great gauge of corporate health, but it's not immune to accounting trickery. For more, see Free Cash Flow: Free, But Not Always Easy.)


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