Informatica is on the block say senior sources

I have heard from two senior sources in the software industry that Informatica [INFA] is on the block and it has approached Oracle [ORCL]. I don't know what the possible acquisition price would be or any further details.

Informatica's share price closed at $16.45 on Friday May 9. It's market capitilization is $1.45 billion.

Informatica is located in Redwood City, very close to Oracle's headquarters. It is in a software sector that has seen a lot of M&A activity. In an interview last week, Rob Ashe, head of IBM's business intelligence group, told Larry Dignan, Editor-in-Chief of ZDNet, that the Business Intelligence market has seen a lot of consolidation and will likely see more.

SAP bought Business Objects, Oracle picked up Hyperion and IBM acquired Cognos. “The consolidation we have seen is a manifestation of the importance of BI to companies both large and small,” says Ashe. The rub: Customers are “expecting more from vendors in this space.” Ashe wouldn’t discuss what other BI players (think Informatica) may be acquired, but did note that it’s difficult to see a big consolidation round given many of the large players have already been gobbled up. “There are fewer targets, but I wouldn’t say the consolidation is over,” said Ashe.

It is more than a year since Oracle acquired Hyperion and Informatica's technologies look to be compatible with those of Oracle. Also, there is synergy in Informatica's executive ranks.