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Oracle acquiring Australian cloud company Aconex for AU$1.6b

Oracle has offered up AU$1.6 billion to purchase an Australian company that provides cloud solutions for construction projects, subject to an independent review and shareholder vote next year.

Enterprise technology giant Oracle has announced entering a binding scheme of implementation deed to acquire Australian cloud services provider Aconex for AU$1.6 billion.

The acquisition will take place via AU$7.80 per share to be paid in cash, which Oracle said is a 47 percent premium on Aconex's closing price of AU$5.29 per share on December 15.

The acquisition remains subject to the examination by an independent expert and a shareholder vote in late March.

Describing Melbourne-based Aconex as a "cloud-based solution that manages team collaboration for construction projects", Oracle said it will combine with the company to offer end-to-end project management and delivery services for planning, building, and operating construction projects.

"Delivering projects on time and on budget are the highest strategic imperatives for any engineering and construction organisation," SVP and GM of Oracle's Construction and Engineering Global Business Unit Mike Sicilia said in a statement to the Australian Securities Exchange on Monday morning.

"With the addition of Aconex, we significantly advance our vision of offering the most comprehensive cloud-based project management solution for this $14 trillion industry."

Aconex CEO and co-founder Leigh Jasper added that the companies have similarities in relation to "vision, product, people, and geography".

The acquisition follows Oracle last week announcing a Q2 net income of $2.2 billion on revenue of $9.6 billion, up 6 percent year on year.

Total cloud revenue was $1.5 billion during the quarter, up by 44 percent. Of this, $1.1 billion was attributed to software-as-a-service (SaaS), while platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS) brought in $396 million, up 21 percent.

OpenWorld 2017: What we learned about Oracle's AI, cloud strategies | Oracle's Larry Ellison: The way to prevent data theft is more automation | Oracle launches 18c, its autonomous database and automated cybersecurity system Tech Pro: Everything as a Service: Why companies are making the switch to SaaS, IaaS, PaaS, and more

Cloud and on-premises software brought in $7.8 billion in revenue during the three-month period, with the company saying its cloud business is "gathering momentum".

Oracle co-CEO Mark Hurd said Fusion ERP and Fusion HCM SaaS suite sales increased by 65 percent.

"Let me tell you who's not moving off of Oracle: A company you've heard of that gave us another $50 million this last quarter. That company is Amazon. They're not moving off of Oracle. Salesforce isn't moving off of Oracle," Hurd said.

"Let me tell you someone else who is not moving out of Oracle: SAP. They have the database called HANA. They'd like to move SuccessFactors. They've been trying to move off of Oracle for five or six years. All SAP large customers run on Oracle. Amazon continues to buy Oracle technology to run their business. Salesforce runs entirely on Oracle."

Oracle CTO Larry Ellison last week said that Oracle's 18c autonomous database, announced during Oracle OpenWorld in October, is expected to launch in January.

"We expect this new technology to dramatically accelerate the growth of our PaaS and SaaS businesses and keep our database licence business strong as well," Ellison said during the results call.

"People are buying database licences to run on-premise[s] and in the cloud. You can run them either place options around on-premise and in the cloud."

Oracle also used OpenWorld to announce its artificial intelligence cloud strategy, including 18c and its highly automated cybersecurity system.

"The way to prevent data theft is more automation," Ellison said in October.

Oracle is also rolling out Blockchain Cloud Service as part of the Oracle Cloud Platform, which subscribers can use to build a blockchain network and then let Oracle manage the network infrastructure. Smart applications and contracts can then be built on top of the network.

Frank Xiong, Group VP of Blockchain Cloud Service, told ZDNet that Oracle is promising the "most comprehensive and enterprise grade blockchain service platform".

"We believe there will be a transition period of time ... blockchain will be integrated with existing applications, whether in cloud or on premise," he said. "You don't need to switch everything overnight, but can move to this new disruptive technology gradually."

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