On Monday, Oracle Corporation (NYSE: ORCL) reported that it has entered into a definitive agreement to acquire Opower Inc. (NYSE: OPWR), the leading provider of customer engagement and energy efficiency cloud services to utilities, for around $532 million.
Oracle will pay $10.30 per share in cash which is approximately 30% premium over Opower’s Friday closing price. Share of Opower jumped up 30.59% to $10.33 on Monday morning, and stock price of Oracle increased slightly 0.38% to $40.01 at the same time.
"Utilities want modern technology solutions that work together to meet their evolving customer, operational and compliance needs," said Rodger Smith, Senior Vice President and General Manager, Oracle Utilities Global Business Unit. "Together, Oracle Utilities and Opower will be the largest provider of mission-critical cloud services to utilities."
"The combination will provide the industry with the most modern, complete cloud applications for the entire utility value chain, from meter to grid to end-customers," said Dan Yates, Chief Executive Officer and Co-Founder, Opower. "We are excited to join Oracle and to bring even more value to our customers as part of the Oracle Utilities Industry Cloud Platform."
Oracle has frequently picked up companies to fill out its businesses, and the company has looked to its cloud-computing business to provide growth. Oracle’s revenue from cloud software had risen 42% during the first nine months of the fiscal year 2016.
Opower’s software stores and analyzes meter reads from 60 million utility end customers. The company’s clients include over 100 global utilities, such as Exelon and National Grid. In March Opower offered a downbeat forecast for 2016, sending shares down to record lows.