Oracle to buy retail software company ATG

Oracle Corp said on Tuesday it will buy Art Technology Group Inc for $1 billion, to bolster its e-commerce software applications.

Oracle's $6-per-share bid represents a 46 percent premium over ATG's close of $4.10 on Nasdaq. ATG shares were trading at $5.99 in early Nasdaq trading.

The acquisition, which is expected to close early next year, is the latest in a wave of dealmaking by a major technology company to diversify product portfolios -- from computing, security, storage and networking to online videoconferencing and e-commerce.

"It's a nice, safe acquisition for Oracle," said Jeff Gaggin, an Avian Securities analyst, adding that the deal will expand Oracle's retail software portfolio, which includes Retek, a retail software company it acquired in 2005.

More than 1,000 companies use ATG software to help with online customer transactions on mobile devices and in stores.

ATG creates software for customers to buy items online. Its customers include Best Buy Co Inc, AT&T and Vodafone Group Plc. It competes with Amazon.com and GSI Commerce.

ATG, which is based in Cambridge Massachusetts, had sales of $50.3 million in the third quarter of 2010, up 16 percent from $43.4 million a year earlier.

Avian Securities' Gaggin called ATG a "moderate grower" and said it was reasonable for Oracle to pay a 46 percent premium on its shares.

Oracle is in a California court on Tuesday seeking some $2 billion in damages from rival SAP AG on accusations that SAP stole its software.

Oracle shares were up 23 cents at $29.38 in Nasdaq morning trade.

(source:reuters.com)