Summit Analyst Comments On Potential Deal Between Oracle, Micros Systems

In a note dated June 18, Summit analyst Richard Williams commented on a possible takeover deal between Oracle (NYSE: ORCL) and Micros Systems (NASDAQ: MCRS) for approximately $5 billion.

Williams said the deal makes sense based on the sentiment at this year's National Retail Federation Conference in New York that retailers will continue to invest in infrastructure software. He noted that this continued investment is driven by the need to compete with large online retailers like Amazon.

Revenues for Micros are expected to be $1.37 billion in 2014 and $1.457 billion in 2015. Williams explained this means the potential acquisition price would represent a 3.1x EV/Revenue multiple and noted Oracle has previously 4.7x and 6.8x for Taleo and RightNow, respectively.

In light of the potential deal, Williams has reiterated a Hold rating and a $35 price target for Oracle.