UPDATE 3-Oracle to buy retail software company ATG

* Oracle to pay $6 a share in cash, or $1 bln

* Price 46 percent above ATG’s Monday close.

* Deal should close by early 2011-Oracle

* ATG valued at 4 times its expected 2011 sales-analyst
(Rewrites, adds details on deal, analysts’ comments,
background)

By Liana B. Baker

NEW YORK, Nov 2 (BestGrowthStock) – Oracle Corp (ORCL.O: ) plans to
buy e-commerce software company Art Technology Group Inc
(ARTG.O: ) for $1 billion in cash to compete with other large
technology vendors like IBM (IBM.N: ) which have been expanding
their software lineups.

Oracle’s $6-per-share bid, announced on Tuesday, represents
a 46 percent premium over ATG’s close of $4.10 on Nasdaq. ATG
shares were trading at $5.96 in Nasdaq trading.

Analysts said the acquisition, due to close early next
year, was a good move for Oracle as it boosted its competitive
position against Salesforce.com, as well as International
Business Machine Corp.

They also said the price seemed reasonable, and Oracle
shares rose 1.1 percent to $29.43 by midday.

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

Large technology companies like Oracle, IBM, and
Hewlett-Packard (HPQ.N: ) have recently been stepping up
acquisitions of niche technology companies to diversify their
product portfolios, aiming to become one-stop shops for
storage, security and a wide range of software.

Dell Inc (DELL.O: ), the world’s No. 2 PC maker, on Tuesday
announced it was buying a private cloud-computing company
called Boomi. In September, Dell lost out to HP in a bidding
war for data storage company 3PAR.

EXPAND INTO E-COMMERCE

Oracle’s latest move may also help the company expand sales
to retailers trying to launch e-commerce services. More than
1,000 companies use ATG software to help with online customer
transactions on mobile devices and in stores.

ATG’s customers include Best Buy Co Inc (BBY.N: ), AT&T (T.N: )
and Vodafone Group Plc (VOD.L: ). It competes with Amazon.com
(AMZN.O: ) and GSI Commerce (GSIC.O: ).

Oracle’s vast sales force would also likely help boost
ATG’s market reach. ATG, which is based in Cambridge
Massachusetts, had sales of $50.3 million in the third quarter,
up 16 percent from $43.4 million a year earlier.

The offer values ATG at around 4 times expected sales for
2011. Roth Capital Partners analyst Nathan Schneiderman said
the valuation placed it at the high end for the industry, and
that he did not expect a rival bid, although he added that
recent dealmaking activity meant it could not be completely
ruled out.

“Generally, there’s not additional bidding after an offer
like this,” Schneiderman said. “But we have seen bidding
battles for software companies. We have seen it often enough
that it’s a dynamic.”

Oracle is in a California court on Tuesday seeking some $2
billion in damages from rival SAP AG (SAPG.DE: ) on accusations
that SAP stole its software.
(Reporting by Liana B. Baker; additional reporting by Ritsuko
Ando in New York and Swati Chitnis in Bangalore; Editing by
Derek Caney, Dave Zimmerman)

UPDATE 3-Oracle to buy retail software company ATG