Shopping spree

San Francisco, July 6 (Reuters): Oracle Corporation has said it is buying private retail software maker ProfitLogic for undisclosed terms to raise the performance of its applications business through acquisitions.

Oracle, the leading maker of database software, is looking to boost its role in supplying applications that run on top of databases, as it competes with rivals such as SAP and International Business Machines Corporation (IBM).

Oracle shares traded up slightly after hours after initially dipping almost 1 per cent after the proposed acquisition was announced.

ProfitLogic makes software that helps retailers make more accurate sales forecasts and pricing decisions by analysing customer demand patterns.

ProfitLogic, based in Cambridge, Massachusetts, has about 250 employees and around 30 customers, including upscale department store Bloomingdale’s and the Toys R Us retail chain.

ProfitLogic and Oracle declined to disclose financial details about ProfitLogic’s business, but AMR Research estimates the company will have between $40 million and $50 million in revenues in 2005.

The buyout deal is expected to close by the end of July.

It follows four other Oracle takeovers this year, including its $11.1-billion acquisition of rival PeopleSoft and two other privately held software makers.

Bruce Richardson, a senior software analyst at AMR Research in Boston, said the deal helps Oracle boost its software product offerings in specific industries, such as retail and financial services.

ProfitLogic will be Oracle’s second recent buyout in the retail software ‘vertical’, or industry segment, after it bought Retek in the spring for about $700 million.

Buying small companies also avoids the integration risks associated with large acquisitions, Richardson pointed out.

“This is not a surprise. They want to flesh-out their vertical strategy ... (Buying) ProfitLogic allows Oracle to either integrate the products or sell them on a stand-alone basis,” Richardson clarified.