Tech Company Oracle Corp has agreed to purchase Aconex Ltd, an Australian based firm that manufactures cloud-based collaboration software for construction projects. According to the agreements between the two companies, the deal is worth A$1.56 billion ($1.19 billion) as Oracle delve into new markets with the aim of gaining more customers.
The deal values Aconex at A$7.80 per share, which is 47% more than their closing price on Friday. After the announcement, the shares of Aconex went up by 44% to A$7.63 on Monday.
Tech Company Oracle has been planning to revamp its business and focus them on Internet-based products. Their strategy hit a rough patch during the third quarter of the year when their cloud-computing sales missed analysts’ estimates.
The company which is based in California during their recent earnings report last week forecasted that their cloud growth would be disappointing for the fourth quarter, news that sent shares falling the most in three months. Oracle has for some time now shifted its attention to acquisitions as they look to fast-track their shift to the cloud, popular amongst their strategy was the $9 billion acquisition of NetSuite Inc. last year.
The board at Aconex unanimously agreed to the deal, according to the company’s statement. The directors of the company who hold around 13.6% of the stock are set to vote in favor of the bid as there is no better offer on the table.
Aconex, the Melbourne-based company designs software that is used by infrastructure and building construction managers to know the current status and potential cost of the project they are about to embark on. Aconex at the moment is one of the Australian companies that have an international presence. According to data gathered by Bloomberg, only eight listed technology companies based in Australia are worth more than A$1 billion, this is a low figure compared to 21 companies that the mining sector has.
Earlier this year, the company became the most-shorted stock in Australia after its stock price plunged. The company stated that the decrease in stock price was due to revenue forecast that was low, with uncertainty caused by the Brexit vote and Donald Trump’s election as U.S. President being the major causes.