NEW YORK (TheStreet) -- Oracle (ORCL) announced the acquisition of the hospitality and restaurant technology provider Micros Systems (MCRS) for $5.3 billion. It's the biggest deal ever in the point of sale systems market, as Oracle, the world's second largest maker of business software, looks towards external sources to revive its sluggish growth.
This is the latest in the string of takeovers in the hospitality and restaurant sector. The deal follows Priceline's (PCLN) $2.6 billion acquisition of restaurant reservation service provider OpenTable (OPEN) and Google's (GOOG) (GOOGL) acquisition of the restaurant website builder Appetas.
Oracle is paying a 17.8% premium over Micros System's closing price on June, 16, before markets started speculations about a possible deal. The transaction is expected to close in the second half of the current year.
The acquisition will likely give a much needed boost to Oracle's revenue and earnings from software maintenance and hardware while strengthening its position in the hospitality and retail sector. Moreover, the markets are also expecting additional acquisitions over the next two years that could fuel its growth over the long term.
Oracle's shares have risen by 7.8% this year and are currently trading near $41. The company has outperformed the S&P 500 ETF (SPY) which has risen by 6.4% for the year to date.
Oracle's acquisition comes after the company released its disappointing quarterly results that highlighted its flagging growth. For the three months ending May 31, Oracle reported a 3.4% year-over-year increase in revenue to $11.31 billion which translated into earnings of 92 cents a share. This growth was driven by 4% increase in software and cloud computing revenue to $8.9 billion.