Oracle to Buy Cloud Services Company NetSuite for

Oracle Corp. (NYSE: ORCL) agreed to buy cloud services company NetSuite (NYSE: N) in a deal valued at about $9.3 billion, a move that will improve its cloud business to catch up with rivals.

The software giant will pay $109 in cash for NetSuite, which representing a 19 percent premium to the company’s Wednesday closing price of $91.57. Oracle said the deal is expected to close in 2016.

NetSuite shares jumped 18 percent to $108.02 in the early trading.

Oracle has been trying to shift the company from software maker to cloud-based product company in the recent year. Buying NetSuite, whose cloud services accounts for 8 percent of Oracle’s total sales after the deal, will help Oracle improve its cloud services business portfolio.

“Oracle and NetSuite cloud applications are complementary, and will coexist in the marketplace forever,” said Oracle co-Chief Executive Officer Mark Hurd in a statement Thursday. “We intend to invest heavily in both products – engineering and distribution.”

While Oracle improves its own cloud products, it is very active in acquisitions to compete with cloud services giants like Inc., Microsoft Corp., and The NetSuite deal will be one of the largest acquisitions for Oracle. In June, it acquired cloud service company Textura for $663 million and device data company Crosswise for a reported $500 million.

NetSuite, founded in 1998, sells cloud business software including customer relationship management and e-commerce tools. The company just reported its quarterly results today. Revenue rose 30 percent to $230.8 million and adjust earnings were $6.6 million, or 8 cents a share, compared with $1.7 million, or 2 cents a share, a year earlier.

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