ATG shares soar on Oracle acquisition news

Database giant paying 46 percent premium for ecommerce software vendor

If you bought shares of ecommerce software and services vendor Art Technology Group (NASDAQ: ARTG) on Aug. 25 at $2.98, a 52-week low, Oracle doubled your investment Tuesday when the database giant announced it would buy ATG for $6 a share, or about $1 billion. ATG shares, which closed Monday at 4.10, rocketed right up to $6 a share at Tuesday's opening bell and have stayed close since. And all because Oracle was willing to pay 46 percent more than what Wall Street thought ATG was worth as of Monday's close. (With 158.1 million shares outstanding, ATG's market capitalization at $6 per share is $948.7 million. At $4.10 -- Monday's closing price -- ATG is worth $648.2 million.) The deal, which is expected to close early next year, must be approved by shareholders of Cambridge, Mass.-based ATG. I wouldn't anticipate any problems there.

So what's Oracle paying for? A popular cross-channel ecommerce platform, ATG Commerce, with on-demand services, more than 1,000 customers and a solid record of revenue growth. In fact, ATG on Tuesday also announced third quarter results, which showed $50.3 million in revenue, up 16 percent from $43.4 million in last year's Q3. Profit has been consistent, if not as impressive. ATG's Q3 net income was $4.2 million, or 3 cents per share, compared to $4.0 million, or 3 cents per share, last year. ATG increased cash flow 51 percent in Q3 to $14.9 million, up from $9.9 million in last year's third quarter. Of course, while this is the big payout for ATG investors, the acquisition is just another day at the office for Oracle, whose shares (NASDAQ: ORCL) were up less than 1 percent to 29.36 late Tuesday morning in light trading. Here's a list of the company's acquisitions over the past few years. It's pretty amazing.

Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.

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