Oracle to buy premier PLM company Agile

Oracle pays $495 million for key player in keeping companies honest when it comes to environmental and food industry regulations 

Oracle announced today that it is buying Agile Software, one of the premier product lifecycle management solution providers.

The deal is being managed as a cash merger for $8.10 per share or $495 million and is expected to close in July.

PLM (product lifecycle management) software is designed to streamline the design, engineering, production, distribution, and support of a product. Agile will serve as the foundation of an Oracle PLM offering, said Charles Phillips, president of Oracle.

Over the last several years, Agile products have played a pivotal role in giving companies the ability to monitor supplier products, both raw materials and finished goods, for compliance with environmental and food industry regulations such as the Food Allergen Labeling and Consumer Protection Act (FALCPA) from the FDA, the Restrictions on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (RoHS) Directive and the Waste Electrical and Electronic Equipment (WEEE) Directive from the European Union. Similar regulations are expected from China and California.

As compliance regulations become more closely intertwined with business strategy and regulations begin to touch all parts of an enterprise from ERP to CRM, industry analysts say it makes sense for Oracle to add PLM software to its suite of enterprise solutions.

Agile currently has 1,250 PLM customers.

The Agile deal is only the latest in a long string of software acquisitions Oracle has made in the past few years. The company has bought large vendors, such as PeopleSoft and JD Edwards, to increase its scale and its customer base. It has also acquired smaller companies that provide it with expertise in vertical markets, such as retail, or in specific technology areas, such as in-memory databases and identity management.

The Agile acquisition appears to fit into that latter category, providing PLM technology that can be used in a range of industries, including manufacturing, consumer goods, IT, and life sciences.

Phillips said the Agile acquisition furthers Oracle's strategy of offering a full range of enterprise software applications. In a dig at rival SAP, Phillips said the acquisition "allows us to offer yet another strategic application to SAP customers."

Acquisitions have helped Oracle grow its share of the applications market against SAP and increase its economies of scale, CEO Larry Ellison has said. But they have also presented the company with the challenge of integrating products, employees, and business cultures into its fold.

SAP has tended to follow a different strategy, growing its business organically and making only strategic acquisitions that provide it with technology it cannot develop quickly itself. It has announced three acquisitions in the last two weeks, an unusually busy period for SAP. They were MaXware, which develops identity management software; Wicom Communications, which develops IP-based call center software, and OutlookSoft, which makes performance management software aimed at CFOs.

(IDG News Service's Robert Mullins contributed to this report)