Tech company, Oracle Co, has announced its plans to acquire construction software developer, Aconex Ltd, for a reported $1.2 billion. Acconex specializes in helping teams working on building projects to collaborate and share documents.
As part of the deal, Oracle Co will pay Aconex Ltd A$7.80 ($5.97) per share, which is 47 percent more than Friday’s closing price of A$5.29 ($4.05). Aconex shares were up 44 percent at A$7.63 as of 11:09 a.m on Monday on the Sydney stock exchange.
This isn’t the first time Oracle has bought a construction software developer. Last year, the company acquired construction management platform, Textura, for $663 million which was later combined with Oracle’s own construction management software, Primavera. The emerging entity was named the Oracle Construction and Engineering Global Business Unit. It remains to be seen if Oracle will decide to incorporate its newest acquisition in its existing branch.
Aconex’s board of directors, who represent about 13.6 percent of the company’s stock, will agree to the bid in absence of a superior proposal.
The tech industry has helped many contractors by converting stacks of paper documents and managing their workload via various digital platforms. Aconex Ltd, which is based in Melbourne, Australia, develops software that helps construction managers to track the status and potential costs of their projects.
Oracle Co, acquired the company just in time, as Aconex share prices fell drastically in early 2017, a side-effect of the uncertainty caused by Donald Trump’s presidency and the Brexit vote.
According to the company, their software was used to manage over $1 trillion in construction projects ever since they opened for business in 2000. Aconex currently operates in 30 countries.
Luke Macnab, an analyst at Baillieu Holst Ltd. Believes the deal to be a good omen for both companies involved. Oracle has gained global recognition thanks to its marketing database software and will hopefully give Aconex Ltd access to the same global stage.
“Aconex were looking to grow globally over the next five to ten years or so,” note Macnab. “This enables them to get global scale pretty much instantly.”
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