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Oracle buying utility data firm Opower to bolster cloud business

OracleCorp. is buying Opower Inc.,a software provider to the electric utility industry, for about $532 million asOracle continues adding to its cloud computing business.

Opowerprovides software designed to help utilities influence customer behavior,including reducing energy consumption and adopting new products and services,according to an annual SEC filing. Using the company's data platform, whichstores and analyzes meter information from 60 million utility customers,utilities can cut service costs and improve customer satisfaction, Opower andOracle said May 2 in a pair of news releases.

"Utilitieswant modern technology solutions that work together to meet their evolving customer,operational and compliance needs," said Rodger Smith, senior vicepresident and general manager of the Oracle Utilities Global Business unit. "Together,Oracle Utilities and Opower will be the largest provider of mission-criticalcloud services to utilities."

Oracleagreed to pay $10.30 per Opower share, a 30% premium to the company's closingstock price of $7.90 per share on April 29, the Friday before the deal wasannounced. Opower shares were trading for $10.30 at 2:35 p.m. ET on May 2.Oracle shares were up slightly at $40.32.

Opowerlast year reported a net loss of $44.9 million, or 87 cents per share, andrevenue of $148.7 million. In 2014, the company reported a net loss of $41.8million, or $1 per share, and revenue of $128.4 million.

OnApril 28, Oracle announced plans to pay about $663 million for Textura Corp., aprovider of cloud-based software used to manage payments and contracts atengineering and construction companies.

OracleCEO Safra Ada Catz, on an earnings call in March, called the company's move tocloud computing "a generational shift in technology" and "thebiggest and most important in our company's history." Oracle has more than11,000 customers using its cloud services.

Inacquiring Opower, Oracle is trying to capitalize on higher utility spending inthe areas of customer engagement, energy efficiency, grid optimization andrenewable energy, Avondale Partners LLC senior analyst Michael Morosi wrote ina client note May 2.

"Facedwith increased competition from distributed generation and regulatory pressureto deliver a cleaner and more efficient and cost effective product, utilitiesare adopting an increasingly customer-centric business model," Morosisaid. He called the Opower acquisition "a reference transaction within thebroader renewable energy sector."

recently announcedits own customer-focused, data-analytics initiative aimed at enhancingoperational flexibility and plant performance. "Big data is transformingour industry into a digitally driven, intelligent ecosystem," SiemensPower Generating Services CEO Randy Zwirn said in a news release. "Siemensis investing significant resources across its various businesses tosuccessfully marry the physical and virtual worlds."