Oracle Shares Gain On Tekelec Deal

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NEW YORK (TheDeal) -- Oracle Corp shares advanced following its purchase of network management outfit Tekelec Global Inc.

The Tekelec deal reflects Oracle's decision to expand its hold on technology that helps telecoms manage increasing traffic over their networks. The deal comes just months after Oracle said it would pay $2.1 billion for Acme Packet Inc. Oracle shares added 1.5% to $32.02.

Tekelec's services include policy control, or helping carriers to handle traffic, target spam, charge for services and other facets of communications. Tekelec also does deep packet inspection, or digging into transmissions to help measure usage and enforce policy.

The latest deals reflect Oracle's push into telecom services, and the growing interplay between information technology and communications.

Oracle CEO Larry Ellison is not alone in targeting companies that manage the flow of data over wireless and wireline networks. Cisco Systems Inc. and others have made acquisitions in network policy control and related services that Tekelec provides.

Ovum Ltd. analyst Dana Cooperson suggested that a range of companies, from telecom networkers such as Alcatel-Lucent SA, Huawei Investment Holding Co. Ltd. and Ericsson AB to IT-oriented competitors such as Hewlett-Packard Co., SAP AG and SAS Institute Inc., might "do more strategic soul-searching." They might look at areas such as managing customer experience, data analytics and other aspects of network intelligence.

As IT and telecoms become more closely entwined, Cooperson said that mobile networks are drawing much of the attention.

"Intelligent network control is the most acute need because of the huge increases in traffic due to mobile broadband and the scarcity of mobile spectrum," she said.

Cultivating new markets may be especially sensitive for Oracle now. The stock has been pounded over the past week after it reported disappointing hardware and software sales.

Oracle did not reveal how much it is paying for its most recent acquisition.

Tekelec, however, is a substantial company. A buyout group including Siris Capital Group LLC, ComVest Group, GSO Capital Partners LP, Sankaty Advisors LLC and ZelnickMedia paid $780 million to take the Morrisville, N.C., networking technology company private in January 2012. Tekelec sold its mobile messaging business to NewNet Communication Technologies LLC in August 2012.